B.C. Liberal leader Andrew Wilkinson, a former doctor, doffs his facemask in the medical fashion before a campaign announcement in Vancouver, Sept. 26. (Darryl Dyck/The Canadian Press)

B.C. VOTES 2020: Echoes of HST in B.C. debate over sales tax

Cannabis, tobacco, luxury cars still taxed in B.C. Liberal plan

When former prime minister Stephen Harper campaigned in 2005 to cut the federal Goods and Services Tax from seven per cent to five, it was popular with voters but not with most economists.

In 2009, former B.C. premier Gordon Campbell emphasized the benefits of shifting from income to sales taxes with an effort to join Canada’s harmonized sales tax (HST). It extended sales tax to more services, while relieving the layers of sales tax from business investment. That backfired with a successful petition against the HST that forced B.C. to restore the seven-per-cent provincial sales tax (PST) and repay a $1.6 billion federal transition fund, pushing B.C. into deficit for 2012.

Now B.C. Liberal leader Andrew Wilkinson is taking the Harper approach, but only temporarily to provide at least a two-year boost to consumer spending as the economy struggles through the COVID-19 pandemic. Wilkinson has proposed cutting the current provincial sales tax to zero for a year after the Oct. 24 election, and then bringing it back at only three per cent for the following year.

“Eliminating PST puts more money in people’s pockets, stimulates growth for struggling small business, and helps British Columbians who are struggling to get by,” Wilkinson said Sept. 28.

The party estimates the province would miss out on $6.88 billion in PST revenue in year one, and another $3.93 billion when the tax resumes at the three-per-cent rate. That would take the province’s deficit closer to $20 billion, with no end in sight to the pandemic’s economic slump and extra health spending demands.

RELATED: NDP’S ‘Neflix tax’ a surprise move for 2020 budget

RELATED: B.C. to add sales tax for sweetened soda drinks

The NDP government has done its own PST changes in its three years of minority government. It raised the PST to 20 per cent on vaping products last year, and in 2018 it hiked PST on high-end vehicles, from 10 per cent to 15 per cent on new or used vehicles costing $125,000 to $149,999. For vehicles costing $150,000 and up, the PST went to 20 per cent.

The B.C. Liberals say their temporary PST cuts would not apply to tobacco, vaping products or high-end vehicles. Cannabis would also continue to be subject to seven-per-cent PST, in addition to the province’s 15 per cent wholesale markup and federal GST on top of all that.

The party has not said whether its PST holiday would extend to gasoline and other fuels, already subject to federal and provincial fuel tax, carbon tax and federal and provincial sales taxes.

Before the sudden election call, former finance minister Carole James put off planned tax changes, including the end of a PST exemption for sweetened carbonated beverages. That is now to take effect April 2021, along with new PST registration and collection requirements for e-commerce businesses located outside B.C.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC politicsBC Votes 2020

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Paradigm Building Solutions CEO Stefan Maunz explains some of the technology being utilized at the facility in the Louis Creek Industrial Park to Simpcw First Nation Councilor Jules Phillips and Kamloops-Thompson-Cariboo MP Cathy McLeod. (Jill Hayward Photo)
Paradigm – third in the World and first in Canada, opens in Louis Creek Industrial Park, Barriere, B.C.

Unique manufacturing technology for sustainable housing solutions through high-end prefabrication

A group photo taken at the grand opening of Barriere Library’s permanent StoryWalk® in Fadear Park on Tuesday, Oct. 20, includes representatives from Thompson Nicola Regional Library including Barriere Head Librarian Pam Rudd and assistant Lisa Copely, District of Barriere Acting Mayor Donna Kibble with Councilors Judy Armstrong and Al Fortin, Barriere Literacy Outreach Coordinator Jill Hayward, Visual Science and Awards managing partner Robert Trudeau, plus a number of area library supporters. (Tasha Buchanan Photo)
StoryWalk® installed in Barriere’s Fadear Park

Take a walk, read a book, have an adventure

District of Barriere Utilities Manager reports to council on Barriere wells

District of Barriere Utilities Manager Ian Crosson presented a verbal report during… Continue reading

(Metro Creative photo)
Mammograms save lives

Mobile screening coming to Barriere

RCMP
Stolen Dodge returned to owner in Blue River

Update from Clearwater RCMP detachment

FILE – People wait in line at a COVID-19 testing facility in Burnaby, B.C., on Thursday, August 13, 2020. THE CANADIAN PRESS/Darryl Dyck
167 new COVID-19 cases, 1 death recorded as B.C. enters 2nd wave

Three new healthcare outbreaks also announced

Volunteer registered nurse Stephanie Hamilton recieves a swab from a driver as she works at a Covid-19 testing site in the parking lot at Everett Memorial Stadium on Tuesday, Oct. 20, 2020 in Everett, Washington. (Andy Bronson / The Herald)
13 more COVID-19 cases in Interior Health region

There are 624 cases in the region since the start of the pandemic

This 2020 electron microscope image made available by the National Institute of Allergy and Infectious Diseases shows a Novel Coronavirus SARS-CoV-2 particle isolated from a patient, in a laboratory in Fort Detrick, Md. THE CANADIAN PRESS/AP-NIAID/NIH via AP
At least 49 cases of COVID-19 linked to wedding in Calgary: Alberta Health

McMillan says the city of Calgary has recently seen several outbreaks linked to social gatherings

UBC geoscientists discovered the wreckage of a decades-old crash during an expedition on a mountain near Harrison Lake. (Submitted photo)
Wreckage of decades-old plane crash discovered on mountain near Harrison Lake

A team of Sts’ailes Community School students helped discover the twisted metal embedded in a glacier

The official search to locate Jordan Naterer was suspended Saturday Oct. 17. Photo courtesy of VPD.
‘I am not leaving without my son,’ says mother of missing Manning Park hiker

Family and friends continue to search for Jordan Naterer, after official efforts suspended

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

A bear similar to this black bear is believed responsible for killing a llama in Saanich on Oct. 19. (Black Press Media file photo)
Bear kills llama on Vancouver Island, prompting concerns over livestock

Officers could not track the bear they feel may not fear humans

Bernard Trest and his son Max, 10, are concerned about B.C.’s plan for students in the classroom. He was one of two fathers who filed a court application in August to prevent schools from reopening if stricter COVID-19 protections weren’t in place. That application was dismissed last week. (Contributed photo)
B.C. dad pledges to appeal quashed call for mandatory masks, distancing in schools

Bernard Trest and Gary Shuster challenged health, education ministries’ return-to-school plan

RCMP crest. (Black Press Media files)
RCMP cleared in fatal shooting of armed Lytton man in distress, police watchdog finds

IIO spoke to seven civillian witnesses and 11 police officers in coming to its decision

Most Read