We have successfully completed our provincial energy affordability analysis, and now it's time to focus on actionable solutions. Recognizing that there isn't any one single solution, we will explore a series of incremental changes that, when combined, could lead to significant savings overall for Canadians.
Solution: Remove GST and PST from Utility Bills
Why do we pay GST on our electricity and natural gas utility bills? Home energy is a fundamental necessity. However, unlike water utility bills, road tolls, or essential items like groceries, electric and gas bills are subject to sales tax.
Sales taxes are regressive, meaning they disproportionately impact lower-income households who spend a higher percentage of their income on utilities. Removing sales tax from utility bills would create a fairer taxation system, where the financial burden is more equitably distributed across different income levels.
Some provinces already offer tax relief. For example, Nova Scotia and PEI rebate the PST portion of HST on utility bills. Ontario offers the “Ontario Electricity Rebate” which is a discount of 19.3% that is applied before HST - meaning that the end result is essentially equivalent to rebating HST. In Saskatchewan, residential electricity and natural gas used for home heating is exempt from PST altogether. And of course, Alberta does not have PST.
The impact of removing sales taxes from electricity would be significant in New Brunswick where HST accounts for over $400 in annual utility bills for average households.
In provinces where PST is not applicable, reducing utility bills by 5% to remove GST might seem small. However, it is a step in the right direction.
