By David F. Rooney
Whether they want to stop it or embrace it, British Columbians needs to make up their own minds about the value of the so-called Harmonized Sales Tax (HST), MLA Norm Macdonald told a small crowd of people Tuesday.
Speaking at a public meeting organized by the Chamber of Commerce, Macdonald said the government has done a fairly poor job of explaining the HST to British Columbians since Premier Gordon Campbell and Finance Minister Colin Hansen announced in July that BC would join the federal initiative.
Currently some products and services are PST exempt, just as some are GST exempt. The agreement with Ottawa — if it ever goes ahead — would change that. The HST would see BC’s seven per cent PST blended with the five per cent federal GST for an over all tax that would be applied to almost everything in the province. But there are exemptions: prescription drugs, basic groceries, most fishery products, farm livestock, medical devices, child-care services and several other goods and services. To find out more, please go to www.gov.bc.ca/hst.
Some products are exempt from the PST portion of the HST such as gasoline and other vehicle fuels, books, children’s clothing, car booster seats, diapers and feminine hygiene products.
The value of the HST is that it simplifies the paperwork that businesses that collect PST and GST now have to do by reducing it one set of forms that will be sent to Ottawa — not Victoria. The federal government will collect all of the taxes and remit BC’s seven per cent portion on a regular basis. As a sweetener, Ottawa is offering to pay Victoria $1.6 billion to help its transition to an HST-type system. That’s a tempting offer awhen the provincial deficit is forecast to balloon to $5 billion from the $495 million the Premier claimed in January.
Macdonald said some businesses will benefit from the HST. Downie Timber, for instance could realize savings of $700,000 because of the HST but “on the other hand Revelstoke Mountain Resort could lose $750,000,” he said.
And there’s part of the rub. Tourism-based industries, which the province once eagerly wooed, restaurants and hotels are going to take a massive hit from the HST. In fact they are already feeling the effects, and the tax hasn’t even gone into effect yet. Tourism BC, an award-winning Crown Corporation created to make the province a tourist mecca is being disbanded. The Hotel Tax will be subsumed by the HST… and the grants for tourism-related infrastructure for official resort communities like Revelstoke? They’re going to be gone, baby, gone.
Meanwhile, even resorts with a spectacular and unique products like RMR with those amazing runs on Mount Mackenzie will be hard-pressed to compete with resorts in Alberta which have no PST at all.
Macdonald told the audience — which, at about 25 people, was very small by Revelstoke standards — that the HST is far from being implemented. It has to be passed by the provincial Legislature and that likely won’t happen before next spring.
Public opinion polling shows that between 75 and 85 per cent of British Columbians do not want the HST. But that’s right now. Some of those people may feel it is inevitable and will resign themselves to it in the coming months. But people can stop it if they want to, Macdonald said.
In fact, City Council has received a report from Finance Director Graham Inglis that outlines the impact of the HST on business in Revelstoke.
“The introduction of the HST in July 2010 appears inevitable,” he said in the report which was received for information by Council during its meeting on Tuesday afternoon.
“While generally the business community regards this initiative as positive there are some businesses that will be negatively affected. “Many of these will be found in the tourism industry where the application of the combined PST and GST rates of 12 per cent will increase prices for their goods and services in a market that is already highly price sensitive and still recovering from a recession.”
Mayor David Raven and the rest of Council plan to raise their concerns about the HST’s impact on local tourism when they meet with Premier Campbell and his cabinet colleagues during the annual Union of British Columbia Municipalities this fall.
Inglis also noted that it appears the province is “open to discussing possible mitigating strategies.” While no one yet knows what those strategies might be — and Macdonald suggests that the government itself may not even yet know how it can mitigate the HST’s impact — “they will certainly be shaped by the degree and effectiveness of any lobbying that can be generated and brought to bear on the provincial government.”
And that’s where private citizens can be effective, Macdonald said.
He urged people to register their concern or their support by writing to: Premier Gordon Campbell at PO Box 9041, Station Prov Govt, Victoria, BC, V8W 9E1 or by sending him an e-mail at firstname.lastname@example.org.
You should also send a copy of your letter to Macdonald at PO Box 2052, Golden, BC, V0A 1H0 or you can send him at e-mail at email@example.com. You can also register your position by writing to your local newspaper. The Revelstoke Current will happily publish e-mail letters in the Opinions Section. Please send them to firstname.lastname@example.org or post a comment at the bottom of this story.