Record-high inflation unrelated to HST hike: Steele

The province’s finance minister says he has no plans of reducing the HST, even though Nova Scotia currently has one of the highest inflation rates in the country.

The national inflation rate hit an eight-year high of 3.7 per cent in May, while Nova Scotia’s rate climbed to 4.6 per cent – the highest in the country.

While the provincial Tories are blaming last year’s two per cent HST hike for climbing inflation, Minister Graham Steele insists there is no real connection between the HST and inflation rate.

“You can’t just assume that all prices, everywhere, for all commodities went up by two per cent because of the HST,” he said. “When we look at what is behind the inflationary increase, there are two things driving inflation in Nova Scotia. They are energy and food. Neither of those is taxed.”

In its monthly report released this week, Statistics Canada blamed gasoline prices for an increase of 0.7 per cent in the inflation rate in May, noting that prices at the pump rose by 29.5 per cent on a year-to-year basis, an even higher jump than what occurred during Hurricane Katrina in 2005.

However, Steele says gas prices aren’t a factor in Nova Scotia’s inflationary increase.

“It is not gasoline that’s driving inflation in Nova Scotia,” he said. “For anybody who’s interested, we can provide all the facts and figures on the different elements, becuase we look at this stuff very carefully. The 4.6 number is a rolled-out number of a lot of different things, but it’s not gasoline that’s driving it.”

Regionally, the inflation rate was higher in eight of Canada’s 10 provinces.
 

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