OTTAWA -- The federal government plans to stop charging GST or HST on hospital parking fees -- a partial reversal of a tax measure imposed in last year's budget.
The 2013 budget ended a special tax break on parking fees at public institutions where the parking lot was run by a non-profit partner.
Hospitals had complained that they would have to absorb the tax, resulting in reduced parking revenues that they use to supplement their annual health care budgets.
At budget time, the government said the change was intended to ensure consistent tax treatment.
"These are companies that are supplying parking to hospitals and they were getting a special tax reduction," then-junior finance minister Ted Menzies told the Commons last March.
"We do not think that is necessary."
But the Finance Department is now proposing to soften part of that measure, and exempt hospital parking fees from the GST or HST.
The Opposition New Democrats call the move hypocritical and accuse the Harper Conservatives of making tax policy "by the seat of their pants."
"A year later the Conservatives have realized that it is taxing sick Canadians which is unnecessary, and isn't going to win them any votes," the party said in a statement.
"It took (Finance Minister Jim Flaherty) less than a year to realize this policy was unfair."
Other institutions affected by last year's tax loophole change, however, remain on the hook for parking taxes.
The Harper government said it would keep amendments in place to eliminate the tax exemption for parking provided by a charity set up or used by a municipality, university, public college or school.
The department is accepting public comments on the proposal until Feb. 24.
