NB Power applies new tax hike to charges made before July 1

NB Power's decision to bill customers for the higher harmonized sales tax level, before the new rate officially kicked in, amounts to a "retroactive" tax hike, according to a taxpayers watchdog.

Customers with bills due after July 1 are getting notices with the new 15 per cent tax, which is an increase of two percentage points, hike already applied.

Aaron Wudrick, the federal director of the Canadian Taxpayers Federation, said people have to know what they pay in taxes up front.

"You can't serve a retroactive bill back and say by the way, all the stuff that you purchased a month ago or six months ago before this date, suddenly now you have to pay an additional tax on top of that."

He said it's a matter of principle to have the tax rate apply to when the costs were incurred.

The tax applies to any taxable item, supply or service made in New Brunswick on or after July 1.

This means as long as anything is billed after that date, it doesn't matter when the cost is incurred, consumers still have to pay that new tax rate.

Deborah Nobes, a NB Power spokesperson, said the utility has applied the tax to customer bills before the two per cent hike came into effect.

Nobes said the corporation is just following the rules and sending the money from the new tax rate to the Canada Revenue Agency.

"NB Power follows rules set by the provincial government about how to transition the HST rate. The date of invoice triggers what tax rate to use," wrote Nobes.

Charges add up quickly

The watchdog said the corporation's customers should stand up to the utility over the move.

"I think if you don't stand up and say this is not right, you run the risk of this happening in situations where the cost is much larger," he said.

"Of course, it may only be a dollar or two for an individual, but you start to multiply that by hundreds, thousands of people and it starts to add up to substantial sums."

It is legal to charge the new HST hike but Wudrick said there is a question of how many bills delivered after July 1 have had the hike applied and what kind of time period the bills span.

"If you are going to tax, you should do it in a transparent way, an open way, so that people are aware of it and that they don't have to have a surprise when they open up a bill and see that they're paying a tax that they had no idea was supposed to be there," said Wudrick.