By David F. Rooney
The Chamber of Commerce has invited MLA Norm Macdonald to answer questions about the proposed “harmonization” of the Provincial Sales Tax and the Goods and Services Tax during a town hall-style meeting at the Community Centre on Tuesday, Sept. 8.
“As there are still many questions involving the Harmonization, I have invited our MLA, Norm MacDonald to Revelstoke as it is his duty to ensure
your questions are answered and your opinion is represented in Victoria,” John Devitt, the Chamber’s executive director, said in an e-mail today.
He said the meeting will begin with an open house starting at 5 p.m., followed by a question and answer session at 6:30 p.m. The provincial government is proposing a joint Harmonized Sales Tax of 12 per cent. The move is cause for concern in several sectors of the economy.
Both the NDP and the BC Liberals have begun wooing British Columbians with their particular perspectives on the HST.
Macdonald says the HST will be applied to goods and services that were previously PST exempt. Current PST exemptions within the tourism industry will disappear with harmonization significantly raising the cost to consumers, he says.
“Local adventure tourism operators are telling me that this added cost will seriously affect their businesses,” Macdonald said in a statement. “And in the case of businesses with fixed-priced contracts in place for after July 1, 2010, the extra cost of the tax cannot be passed on to the consumer.”
He points to the Council of BC Tourism Associations and the Canadian Restaurant and Food Services Association as saying that the impacts of the HST could be catastrophic on many sectors and ruinous to individual businesses. The HST will also result in the elimination of the Hotel Room Tax.
Revenue from the Hotel Room Tax finances, in part, the award-winning Crown Corporation Tourism BC which is now being shut down. Tourism BC was established in 1997 to promote development and growth in BC’s tourism industry and was considered an important player in ensuring that BC meets its goal of doubling tourism revenues to $19.6 billion by 2015. The hotel room tax also funds destination marketing organizations and other provincial supports for resort communities.
“The tourism industry is a very big part of the communities I represent. We have come to depend on growth of tourism and hospitality for our economic well-being and the implementation of HST could be devastating,” Macdonald in his statement. “For tourism operators in my communities the BC Liberal HST just does not make sense.”
For his part, Finance Minister Colin Hansen has sent a letter to BC Liberal Party members telling them why he thinks the HST is a good deal for the province.
“Current estimates are that the HST will allow our job-creating industries to avoid passing onto consumers an estimated $1.9 billion annually in embedded costs,” he said in the letter.
He said HST will mean savings of $880 million for the construction sector, $140 million for manufacturing, $120 million for transportation, $140 million for forestry and $80 million for mining, oil and gas.
“These industries are the cornerstone of job creation in every region of our province, Hansen said. “These savings are vitally important in ensuring that our companies can maintain their competitiveness and hire more British Columbians. It’s important to remember that when our resource industries are strong they support our other community industries such as retail and the service sector.
“By moving to a single tax system we eliminate $150 million a year in compliance costs placed on every business to administer two parallel tax systems. Government itself will save $30 million in reduced compliance costs, which will go directly back into programs for families.”
Come to the Chamber’s meeting at the Community Centre on Tuesday, Sept. 8, at 6:30 p.m. to judge for yourself whether HST is a good deal or a bad one.