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

test tube with the blood test is on the table next to the documents. Positive test for coronavirus covid-19. The concept of fighting a dangerous Chinese disease.
Interior Health records third COVID-19 death

A new community outbreak was reported at Okanagan Men’s Centre in Lake Country

NAV CANDA is considering closing its station at the West Kootenay Regional Airport. Photo: Betsy Kline
Nav Canada considering closing station at West Kootenay Regional Airport

The organization is conducting a service review at Castlegar’s airport

Marysville Arena will not open right now. Bulletin file
Marysville Arena to remain closed for now, Kimberley Council decides

Kimberley City Council voted unanimously on Monday night to keep the Marysville arena closed for the start of the ice season.

An example of the entrance to Marysville, where Sustainable Kimberley says a few trees could make a world of difference.
Sustainable Kimberley makes presentation to Council

Group looking to increase urban green space

Provincial health officer Dr. Bonnie Henry updates the COVID-19 situation, B.C. legislature, Oct. 26, 2020. (B.C. government)
B.C.’s COVID-19 case count jumps by 287, another senior home outbreak

Two more deaths recorded, community outbreak in Okanagan

An untitled Emily Carr painting of Finlayson Point was donated to the Art Gallery of Greater Victoria by brothers Ian and Andrew Burchett. The painting had been in their family for several decades. (Courtesy of the Art Gallery of Greater Victoria)
Never before seen painting by famed B.C. artist Emily Carr gifted to Victoria gallery

Painting among several donated to Art Gallery of Greater Victoria

The B.C. Centre for Disease control is telling people to keep an eye out for the poisonous death cap mushroom, which thrives in fall weather conditions. (Paul Kroeger/BCCDC)
Highly poisonous death cap mushroom discovered in Comox

This marks first discovery on Vancouver Island outside Greater Victoria area

100 Mile Conservation officer Joel Kline gingerly holds an injured but very much alive bald eagle after extracting him from a motorist’s minivan. (Photo submitted)
Rescued bald eagle that came to life in B.C. man’s car had lead poisoning

Bird is on medication and recovering in rehab centre

Janet Austin, lieutenant governor of B.C., was presented with the first poppy of the Royal Canadian Legion’s 2020 Poppy Campaign on Wednesday. (Kendra Crighton/News Staff)
PHOTOS: B.C. Lieutenant Governor receives first poppy to kick off 2020 campaign

Janet Austin ‘honour and a privileged’ to receive the poppy

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Premier-elect John Horgan and cabinet ministers are sworn in for the first time at Government House in Victoria, July 18, 2017. (Arnold Lim/Black Press)
Pandemic payments have to wait for B.C. vote count, swearing-in

Small businesses advised to apply even if they don’t qualify

A raccoon paid a visit to a Toronto Tim Hortons on Oct. 22, 2020. (shecallsmedrew/Twitter)
Who are you calling a trash panda? Raccoon takes a shift at Toronto Tim Hortons

Tim Hortons said animal control was called as soon they saw the surprise visitor

Slippery roads led to this crash in West Trail on Friday morning. Photo: Trail RCMP
First snow in Kootenays causes multiple crashes; one suspected of involving alcohol

The Trail and Greater District RCMP’s weekly brief contains details on collisions

Most Read