News and event information for Williams Lake, BC - as it happens.

There are many pros and cons to harmonising the PST and GST into the single Harmonised Sales Tax or HST.  I have spent the last while doing research on the HST and have come up with the conclusion that it is good public policy but difficult politics.  Good public policy in the sense that the HST will definitely improve productivity and competitiveness for rural industries such as forestry and mining, which are our major employers in the Cariboo Chilcotin.  The HST is difficult politics, in the sense that how it benefits us in BC has not been explained well. 

BC must be competitive in the global market place. The HST will make BC one of the most competitive jurisdictions not only in Canada, but in the world. Adoption of the HST will result in BC’s taxes on business investment being lower than neighbouring jurisdictions. This means rural communities will be an attractive place for investment. This will create long-term stable and well-paying jobs. 

How does the introduction of HST support investments in job-creating industries?  You may not realize it, but the current PST is charged multiple times during the production of a product before it reaches the final user. The HST eliminates these taxes that are embedded or hidden along the “value chain” and replacing them with a single visible tax.  That is why it is called a “value added tax”. This single tax is much less expensive to industry and business, which in turn enables them to grow and create jobs. This single tax is also the fairest all round tax for consumers because it is upfront and taxes everyone evenly across the board instead of being randomly buried or ‘hidden’ in product. 

Businesses are market driven and must be competitive.  Thus those who do not pass on their savings will not be competitive. Studies of the implementation of HST, in eastern Canada, have confirmed that its introduction resulted in lower prices for consumers.  International studies show countries with value added taxes, like HST, have lower prices. I know savings to business will be passed on to consumers, because if businesses don’t pass on their savings, customers will simply shop elsewhere. 

Due to the fiscal challenges that have been put upon us by the Global Economic Crisis, some tough decisions have had to be made.  I don’t like increased taxes any more than you do, but I see no choice.  What are our alternatives? The money to support our vital services such as health care and education has to come from somewhere.  The HST will bring in federal dollars that will help ensure that our services don’t suffer. 

The government has also instituted a mitigation plan to help protect low income individuals, families and seniors from increased costs.  I have listed some of the new tax credits and exemptions: 

Low income individuals and families will receive the BC HST credit of $230 per family member

Medical services premiums for those with low incomes will be reduced

For individual taxpayers, the basic personal income tax credit is being increased to $11,000 from $9,373, an increase of 17 per cent, effective January 1, 2010.

Consumers will not pay the seven percent provincial portion of the HST on residential energy including oil, electricity, natural gas, and propane used to heat or power homes

Gasoline, ethanol, diesel and biodiesel when used in motor vehicles are exempt from the provincial portion of the HST

Books, feminine hygiene products, diaper’s, children’s sized clothing and footwear, children’s car seats and booster seats are also exempt from the provincial portion of the HST

Consumers will not pay HST on many essential items such as residential rent and basic groceries.

All items that are currently ‘0’ tax rated for GST will be exempt from HST

Go to this website for a more comprehensive list of HST exemptions and ‘0’ tax rated items: http://www.gov.bc.ca/hst/rebates_exemptions.html 

Since the announcement in July, I have heard from a few people who would cut everything regardless of need, others who would increase services without any additional revenue to provide for them. But most of those I have heard from have the common sense to know that if you have no money in the bank, you can’t write a cheque.  By implementing the HST we will be getting money from the federal government to help protect vital services, ensuring that BC is competitive in the world market and encouraging investment in our industries that will help to create jobs. I believe this will enable us all to prosper in the long term.  

Sincerely, 

Donna Barnett,
MLA Cariboo Chilcotin
100 Mile House, BC

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