Cumberland County and Cross-Border ShoppingNovember 5, 2010

Nova Scotia’s Fiscal Plan

2

6.0

8.0

10.0

($ B

illio

ns)

FISCAL PLAN

Revenue

Expenditure

per Economic

Panel

per Economic

Panel

HST and the Fiscal Plan

3

$1,4

89

$1,2

58

$996

$596

$448

$441

$387

$381

$305

$215

0

200

400

600

800

1000

1200

1400

1600

ON AB NB SK PQ MB PE NL BC NS

Deficit per capita 2010-11(Budget Estimates/1st quarter updates)

HST and the Fiscal Plan

4

46.8

%

45.1

%

42.7

%

41.2

%

39.2

%

38.9

%

36.8

%

36.0

%

38.7

%

38.9

%

39.5

%

39.3

%

38.3

%

20.0%

30.0%

40.0%

50.0% NS NB ON 2010-11 Deficits:NS: $0.20 billion = $215/capitaNB: $0.75 billion = $996/capitaON: $19.7 billion = $1,489/capita

HST and Retail Sales

5

80

85

90

95

100

105

110

s o n d j f m a m j j a s o n d j f m a m j j a

2008 2009 2010

inde

x Se

p 20

08=1

00

CA, NB and NS Retail Trade(seasonally adjusted)

NSCANB

NS Aug 2010$1.06 Bindex = 102.5

CA Aug 2010 $36.1B index= 99.0

Sep 2008CA: $36.44BNS: $1.03BNB: $0.87B

NB Aug 2010$0.87Bindex = 100.6

Related budget measures

New Affordable Living Tax Credit

New Poverty Reduction Tax Credit

New exemptions: children’s clothes and shoes, diapers,

feminine hygiene products

6

What we learned in April (Pre HST Increase)

Cross border shopping is a long-standing activity in Cumberland Co.

50 per cent of residents travel monthly

Main destination: Moncton (80%)

Cross border shopping is low volume75% of residents make 75% of purchases in NS

More for Amherst residents

NB shopping for routine items already growing in April

Prices determine cross border shopping for routine items

But for major purchases, selection and variety are important

7

Cross Border Shopping Frequency

8

1% 11%

34%

36%

3%

14%

1%1% 12%

39%

29%

4%

14%

0%

0%

10%

20%

30%

40%

50% How often do you shop in NB?

Mar-10 Oct-10

Cross Border Shopping to NB

9

80%

18%

2%

82%

15%

3%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Moncton Sackville/Aulac Other

Primary shopping destination in NB

Mar-10 Oct-10

Cross Border Shopping Volume

10

69%

19%

6% 4% 2%

63%

22%

9% 4% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80% Routine PurchasesMar-10 Oct-10

75%

15%

5% 3% 1%

73%

15%

5% 5% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80% Major PurchasesMar-10 Oct-10

Has your shopping in NB changed…

11

70%

23%

10%

9%

8%

7%

5%

3%

2%

2%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Unaffected

Gasoline

Food/groceries

Cigarettes

Clothing

Milk

Electronics

Furniture

Alcohol

Vehicles

No changeDon’t shop in NBShop less in NB

Higher frequency purchases in N

B

Fuel

12

0

10

20

Jan/

2000

Feb/

2001

Mar

/200

2

Apr

/200

3

May

/200

4

Jun/

2005

Jul/

2006

Aug

/200

7

Sep/

2008

Oct

/200

9

¢ pe

r lit

re

Gas TaxNova Scotia

New Brunswick

0

10

20

Jan/

2000

Feb/

2001

Mar

/200

2

Apr

/200

3

May

/200

4

Jun/

2005

Jul/

2006

Aug

/200

7

Sep/

2008

Oct

/200

9

¢ pe

r lit

re

Diesel Tax

Nova Scotia

New BrunswickFuel tax- not HST- is the main driver of price differences

UARB advice is that the market is viable

Government will continue to monitor

Questionable that NB prices will continue in the future

Tobacco

13

0

10

20

30

40

50

Jan/

2000

Aug

/200

0

Mar

/200

1

Oct

/200

1

May

/200

2

Dec

/200

2

Jul/

2003

Feb/

2004

Sep/

2004

Apr

/200

5

Nov

/200

5

Jun/

2006

Jan/

2007

Aug

/200

7

Mar

/200

8

Oct

/200

8

May

/200

9

Dec

/200

9

Jul/

2010

$ pe

r ca

rton

Tobacco Tax

Nova Scotia

New Brunswick

Milk and GroceriesMilk and basic groceries are not

taxed

Some prepared and non-basic

food—pop; snack foods—are

taxed across Canada

If milk is more expensive in NS,

it is due to wholesale and retail

pricing: the regulated minimum

price for milk in NS is lower than

NB- $2.69 .vs. $3.04 (2L)

14

As of May 2010- 2L

RegulatedMinimum Price

RetailPrice-grocery store

Retail-Wholesale Mark-up

Aulac, NB $3.04 $3.67 $0.63

Amherst, NS

$2.69 $3.91 $1.22

Alcohol

No evidence of across the board

cheaper prices in NB

Some classes and brands of products

are cheaper, some more expensive

Numbers show a healthy retail

market in Amherst compared to

other comparable NS markets, e.g.,

Yarmouth

15

As of October2010

Amherst Yarmouth

Population 13,550 12,785

Average Income

$47,861 $47,293

Main store size 12,000 sq ft 12,000 sq ft

Products available

1871 1889

Average spend p/pop

$640 $649

Average spend p/trip

$30.23 $30.23

Transactions to date

144,696 138,846

Shopping travel within NS- New

16

3%

24%

35%

23%

4%

11%

0%0%

10%

20%

30%

40%

50% How often do you travel in NS to shop?Shopping outside community: Oct-10

Shopping travel within NS- New

17

56%

22%14%

2% 1%5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Amherst Halifax Truro Pugwash Springhill Other

Primary shopping destination in NSShopping outside community: Oct-10

Sales taxes: Canada & border states

18