Tax increases in Eastern Canada
Newfoundland (NL) and New Brunswick (NB) announced an increase Harmonized Sales Tax (HST) rates from 13% to 15% effective July 1, 2016. Prince Edward Island (PEI) also announced an HST increase. Their rate will increase from 14% to 15% effective October 1, 2016. The HST rate increase will affect fees on Administrative Services Only (ASO) with no insurance component, other group benefits fees for services and Investment Management Fees (IMF) for Group Retirement Savings (GRS) products in their respective provinces.
Newfoundland will increase Insurance Companies Tax (premium tax) from 4% to 5%, effective July 1, 2016. This increase will be applied to group benefits insured and Administrative Services Only (ASO) business with plan members living in Newfoundland. There is no impact to GRS business.