Vaughn Palmer, Vancouver Sun November 17, 2009
The B.C. Liberal government’s plan to combine the provincial and federal sales taxes into a broader 12-per-cent harmonized sales tax got a rough ride from the public during recent budget consultations by the legislature committee on finance.
The report on those consultations, released Friday, highlighted support for the tax from exporters, business leaders, the resource industries and chambers of commerce. But that emphasis mainly showed the hand of the Liberal majority on the committee. There was no disguising that the bulk of the feedback — almost 3,500 submissions, mostly written or on-line — was strongly negative about the government’s post-election surprise.
“Many participants disagreed with the implementation of the HST,” reported the committee. “Many British Columbians disputed the claim that government, in fact, was reducing taxes — citing the HST as an example of a tax increase on individual consumers.”
Then, too, “the committee received numerous written and online submissions from individuals and small businesses claiming that the HST, as designed, increases the tax burden faced by low- and middle-income families.”
Even from within the business committee, the committee heard strong objections to the tax. “Three sectors of the B.C. economy were opposed: the food service industry, tourism and the organization involved in the construction and sales of new homes.”
Many of the business organizations that support the tax urged the committee “to consider providing specific relief to reduce the short-term impacts.”
But as the committee went on to note, the province is severely restricted in its ability to offer direct relief from the tax under the terms of its implementation agreement with the federal government. “B.C. is only able to designate a limited number of point-of-sale rebates for the provincial sales tax portion. The value of the rebates is not to exceed five per cent of the estimated tax base for B.C.”
The allowance was mostly used up by the exemptions that have been announced to date: for gasoline, diesel fuel, books, children’s clothing, car seats, diapers and feminine hygiene products.
With next to no leeway to create additional exemptions, the committee was forced to fall back on other options for mitigation. The most significant in dollar terms was probably the call for “no significant negative impact for boards of education, post-secondary institutions and health regions.”
The impact on school districts alone has already been estimated at $40 million a year, including additional taxes that would have to be paid on both operating and capital spending. There was also a call for the federal and provincial governments to reduce the hefty tax burden that will descend on privately run care homes for seniors. The sector used to regard the Liberals as an ally in lobbying for relief from the five-per-cent federal tax on services. Now it will be doubly bitten by a 12-per-cent federal-provincial levy on the same services.
The committee urged the province to increase the price at which the HST would begin to apply to new homes, arguing that the currently proposed threshold ($400,000) doesn’t address the realities of the new-home market in Metro Vancouver.
Though business already stands to gain the most from sales tax harmonization, the Liberals nevertheless recommended that the government consider additional relief for the sector. Currently, the government intends to hold off allowing larger businesses (those with annual sales of $10 million or more) to claim all of the offsetting credits available to them under the HST. The committee would speed up the phase-in on those credits, “should economic improvement allow.”
Four other recommendations were of a relatively minor or technical nature. Exempt fixed-price tourism contracts that were concluded before the HST announcement, even if they don’t take effect until after the tax is implemented. Hold off phasing out the additional hotel room tax in those communities, like Kamloops and Kelowna, where it is used to fund tourism marketing. Plus reduce the audit period and speed up the release of transition rules for the various economic sectors.
So, something for tourism, home builders and care homes. Nothing for food services. And no relief at all for consumers, who come next July 1 will be paying 12 per cent for a range of goods and services that are currently subject to just the five-per-cent federal GST.
As the half-dozen Liberals on the committee cobbled together that somewhat pathetic mitigation strategy, they got neither help nor sympathy from the New Democratic Party minority. The four NDP MLAs went along with most of the committee’s other recommendations on the budget, some three dozen in all. But on the HST, they kept their distance from all eight Liberal recommendations in favour of one of their own that will surely be more popular with the public: “Abandon it.”
No need to mitigate the impact if you don’t harmonize in the first place.
© Copyright (c) The Vancouver Sun
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The first reason Campbell is bringing the HST in to play, is because Harper bribed Campbell to do so. Remember this, Campbell only does things that will bring him personal gain. Such as the BCR, selling our rivers, bribing the Haisla Band not to hold up the sale of our hydro to his business friends. Child poverty does nothing for his personal gain, so, that he ignores. Raising the lowest minimum wage in the entire country, also would not benefit him personally, that is also ignored. He doesn’t give a dam if, the HST is going to cause seniors and low income families to be homeless. He will be a billionaire from everything he has stolen from the citizens of BC. And he is full of, you know what. There will be no savings for the consumer because of the HST
this proposed tax increase will not help the province but it will increase the coffers in victoria due to charging tax on items that are now not pst’d
it will place more on the unemployment lines and social service linup because of the increase of spending will make ppl spend less then the snowball effect will come into play.
It seems, if you are a senior, you get taken every time you turn around. Even though, we are under the level of poverty, we have the government after us for income tax as well, we seniors have few tax write offs. So, a senior living on their own, and no spouse to share expenses with, means, we lose our homes, when the HST comes in. Instead of the government cleaning up the corruption in their ranks, they just hit us with more taxes, to pay for more and more corruption bills. This is what I understand now. Don’t expect the best of our government, you will be further along, if you expect the worst. They play their silly little juvenile games and think we don’t see through them. We have had many years of practice, seeing devious and underhanded and lying officials, to believe any of them.
I must be out for lunch. I thought the HST in BC, was a done deal. It was my understanding that Harper bribed the provinces to push the HST through? Harper and his henchman Campbell, had no thought or\care, what this stupid tax would do to people. By Campbell’s past performance, we expected the worst of him. And, we were told by Harper, he did not want the HST, so I guess, Harper lies like Campbell. This is like Hitler, Stalin and Mussolini, all rolled into one.
It is true that, between Harper’s bribes and Iggy’s threats, to Liberal MLA’s, and such, if they vote no, to the HST, they will be be made to suffer for doing so. I thought, bribery and threats, would be extortion, perhaps that only applies to the common folks. You hear of, criminals using extortion,threats, and bribery. When caught, these criminals do time. I haven’t got a lick of respect for any governing officials, in this country. Perhaps, Iggy, Harpo and Gordo, should be kicked off the planet, it would, mean, our country would be a better place. That would, perhaps give pause, to other officials to stop their corruption.
What I am wondering, if, what I read is true. Canada, Mexico and the USA, will be one state. Identical: currency, health care, education, and so on. We would be called, The North American Union. I was shocked to learn, that, this plan, has been worked on for decades. But it all fits, citizens, are having all their rights taken away, and we are forced into, more and more taxes, shoved down our throats. The government does dictate to we peons. I can’t find one person, that, trusts, governing officials.
All our young boys, in the service, during WW11, fought and got blown to bits, so Canada, would be safe from a dictatorship, have died for nothing. Canada, is becoming fascist, and our rights are, disappearing very quickly.
As a senior, the government makes it impossible for me to help myself. I had bought a small amount of RRSP’s,to pay insurances, taxes and the like. Problem is, the government takes 20% off the top, before you even get the money. You then have to add the RRSP’s you took out, to your income, you then, get taxed all the harder. Being on a small fixed income, the RRSP’s are useless to me. So, I had to get rid of my car, gas and insurance were too costly. You can’t even use your emergency RRSP fund, I can’t afford to. The CRA staff can’t stay on top of all the tax grabs. There is an ever increasing number of people, fuming and fighting, with the CRA. There has been corruption in their ranks, so no-one trusts them anymore than they do,corrupt governing officials. It would be to much to ask, for fair taxation, to stop the corruption. Canada’s politicians, do not keep the oaths they make. Canada’s constitutions are no more.