Nova Scotia to raise licensing fees, ponders fuel tax increase

HALIFAX (April 1, 2002) — The Nova Scotia government will hike driver licensing and vehicle registration fees as part of a plan to increase revenue by $17.8 million a year.

The cost of a driver’s licence will jump $11 to $60. Trucking companies will face a new registration fee of $50 per vehicle. And municipalities will no longer receive discounts on fees for restricted licences on municipal vehicles. On that measure alone, the province now expects to raise $1.5 million a year.

Finance Minister Neil LeBlanc said the measures are part of a balancing the budget, to be released Thursday.

The province is also considering an increase in fuel tax, according to the Canadian Press. Any hike in fuel tax would result in additional sales tax as well: unlike many other provinces, Nova Scotia applies its sales tax to a fuel price that already includes the federal excise tax and the provincial road tax.

The situation is a result of the harmonized sales tax, created in the mid-1990s when Nova Scotia, New Brunswick, and Newfoundland merged their sales taxes with the federal GST. While all the provinces and Ottawa already had taxes included in the price of gasoline — a fixed value per litre — the 15%HST was applied to the overall tax-included price.

About 1.1 billion litres of gasoline are sold in Nova Scotia each year. If the province raises its 13.5-cent-per-litre road tax by two cents, it would take in an extra $22 million. With the HST piggybacking on that increase, consumers would have to pay another $3.3 million to the federal and provincial governments.