HST on seal pelts should only be applied on a go forward basis

Tom Rideout, Minister of Fisheries and Aquaculture, today said that it would be unfair to sealers to make it retroactive that they have to charge HST on seal pelts. The minister is calling on the federal government to apply this policy on a go forward basis only.

Minister Rideout said, "In an effort to be fair to sealers, the federal government should only require that sealers pay HST on the future sale of pelts. This would require sealers to begin collection of the tax from their buyers in 2006."

Sealers understood they were exempt from HST. They were not aware that they were required to collect this tax and remit it to the federal government previously. This was a reasonable understanding given that it is not required that HST be charged on the sale of fish or shellfish.

Sealers were not charging HST to their buyers and will have major problems collecting it on a retroactive basis. This will leave them in the position of having to pay the entire cost themselves personally and that will add up to a lot of money for many sealers.

"It would be unfair for Canada Revenue Agency (CRA) to make this policy retroactive. This would be a financial burden for sealers in this province," said Minister Rideout.

"CRA has been auditing fisherman for 15 years and has not raised this issue before. Therefore, they should also share some responsibility in this problem," said the minister. "Consequently, it is the province's desire that CRA not issue retroactive assessments."

The sealing industry is an important component of the economy of Newfoundland and Labrador. This is particularly the case in rural parts of the provinces. In 2005, the landed value of seals was approximately $ 15.7 million.

Media contact: Lori Lee Oates, ABC, Communications, (709) 729-3733, 690-8403

2006 01 04                                    3:50 p.m.