It's early days but there's no question that today's suprise announcement by Premier Gordon Campbell and Finance Minister Colin Hansen that BC will "harmonize" its PST and the GST into a blended 12% tax will cost you a lot of money.
That's because the new "HST" of 12% will apply to a lot of goods and services that previously were only subject to one of the two taxes.
Here's a short list of affected goods and services that are currently exempt from the 7% PST but will be subject to the full 12% HST when it is implemented in July 2010.
Businesses are able to recover the PST portion of the tax they currently pay - meaning in theory that the price could come down 7%.
GOODS
• Food portion of restaurant meals
* Residential fuels (electricity, natural gas) and heating.
• Basic cable TV and residential phones.
• All food products (only basic groceries will remain exempt under new tax).
• Non-prescription medication.
• Vitamins and dietary supplements.
• Bicycles.
• School supplies (books will continue to be exempt).
• Magazines and newspapers.
• Work-related safety equipment.
• Safety helmets, life jackets, first-aid kits.
• Smoke detectors and fire extinguishers.
• Energy conservation equipment (e.g., insulation, solar power equipment).
SERVICES
• Personal services such as hair care.
• Dry cleaning.
• Repair services for household appliances.
• Household maintenance such as renovations and painting.
• Real estate fees.
• Membership fees for health clubs.
• Movie and theatre tickets.
• Funeral services.
• Professional services such as accounting and home care.
• Airline fares within Canada.
So why has the government suddenly introduced this new HST?
One big reason is that the federal government will give BC $1.6 billion to implement the change to the HST.
But the other big reason was given in the BC government's own news release - here is the list of groups supporting the "harmonization" of the GST and PST - see if you can guess what they all have in common:
SOME ORGANISATIONS THAT HAVE CALLED FOR HARMONIZATION
B.C. Business Council
B.C. Progress Board
B.C. Chamber of Commerce
Canada West Foundation
Conference Board of Canada
Chartered Accountants of British Columbia
Retail Council of Canada
Canadian Manufacturers and Exporters
Certified General Accountants – British Columbia
Certified General Accountants – Canada
Gee - no labour groups, no consumer organizations, no community groups - just business oriented organizations!
More on this in the days ahead.
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34 comments:
Gordo must be real desperate for money and will upset just about anyone to get it. Maybe the fed government will change before it will become cast in stone and saner minds will prevail. This would be as Bill says a real hit to so many people having trouble getting fed, clothed, and housed as it is.
Looks like the bait for the Libs was the $1.6 billion in funding "to balance their budget".
On the same subject, why didn't the Nova Scotia NDP propose to get rid of the HST in their election platform?
Just taking it off electricity bills doesn't make any sense either.
This was pushed up a week in order to cover up the email fiasco.
The announcement was rushed, no details from Ministry of Finance officials, and the materials were incomplete.
As Premier Deceiver said, "Business will save $1.9 billion."
Since they also called the tax change "revenue neutral", that means thee and me and other consumers will pony up exactly $1.9 billion more.
This is part of the continuation of the Security & Prosperity Partnership (SPP). Harmonization is part of this plan. They have to "harmonize" things across Canada first, everything they're doing is in incremental steps, it's the way of all totalitarian nations in the making.
Of course the federal NeoCons are going to sweeten the impetus to get the provinces to take this step.
I hope all of these business groups get their heads out of dark places when they realize how much this is is going to cost them too. Tax write offs are NOT going to be sufficient to cover the cost of living increase that this is going to bring on.
Also, why isn't anyone mentioning the timing of implementation, July 2010? Yet another way that the people of BC, will be footing the bill for the Olympics generations into the future. Most of us will watch it on TV and will pay the price for the rest of our lives in raised taxes, cuts to public services and for some, tragedy.
I'm not surprised they moved this up into this week's media. There are more bombshells to come soon, what else do they have?
Could it be that the provincial government wants this harmonized so that in future say around July 2010 or before, they can jack up the pst. They would say they tried to keep it down but just couldn't. And its part of the Gst now.
And the distraction continues,nothing on the tube...again,what the hell!
The theory,the spin is all wrong,it will cost jobs,lots of jobs.....
Just imagine how ALL the BUSINESSES near the Alberta border are feeling,cross the border and save 7% on all purchases....
This will drive more people south of the border to purchase goods......
And more bullshit lies from Hansen,explain how more business will invest in BC,explain Hansen`s statement of increased productivity?
This will also create an uptick of the underground economy......
And if it was such a smart idea why does Harper have to bribe Campbell into raising taxes,he would of done it on his own if it was a smart idea.
And as for changing the subject to deflect from BC Rail,uh uh,there is no-one who is in favour of a harmonized tax,at least not this one!.........
Bill Tieleman,I put this to you,these groups might have wanted a harmonized tax but none of these groupd wanted once PST exempt items to now become taxed!
Campbell is twisting the spirit of harmonization,this won`t lower prices of imports or exports.....
And I dare any credible economist to make the case that this is good for BC
Cheers Eyes Wide Open
Everything purchased by residents in the Interior of BC is moved by the trucking industry & the added TAX grab (carbon TAX) is added to everything that we buy. Now blood sucking gordo et al are trying to drain the last drop to pay for their egotistical dreams. Time the opposition got a decent leader & throw the lying bloodsucking liberals out
Everything purchased by residents in the Interior of BC is moved by the trucking industry & the added TAX grab (carbon TAX) is added to everything that we buy. Now blood sucking gordo et al are trying to drain the last drop to pay for their egotistical dreams. Time the opposition got a decent leader & throw the lying bloodsucking liberals out
The Berlin 1936 Olympics, sorry I mean our beloved BC Leader's Vancouver 2010 Olympics are going to cost us the next 20 years of our future.
So you better get used to opening your wallet for Gordo's celeb-legacy games until at least 2030.
I expect the Health Ministry under Herr Falcon will be the poster child for a lean, mean and privatized public sector in order to generate even more dollars to pay for the Leader's 30 days of international glory.
The government's legal fees over Basigate alone will require tens of millions of your tax dollars to keep the on-the-take crowd out of prison.
The GREAT SATAN
Why would unions support the BC Liberals?
They're in Carole's pocket, not Campbell's.
Way to go Gordo! One implication that seems to be missing is how much growth will be seen in the underground economy. If you can save 12% by paying cash,then I expect the tax base will suffer from this short sighted grab.
It's soon time to grab the pitchforks and torches and have a roadtrip to Victoria....
Don't count on that DPL, the Federal Liberals have been big backers of pushing provinces to harmonize as well...The cupboard is bare, Campbell listens to his 'base' and, all PST collection services and personnel will become redundant after next July...apart from the cash of course.
Check Reasides cartoon site today Friday for his take on the latest tax grab by Gordo and Co. another vision that wasn't well thought out but Harper offered money and Gordo had his hand out quick as a flash and to hell with everyone else.
Gordo must be feeling some heat with what's going on in court on Basi-Virk if he releases news about harmonization of GST and PST on the same day that defence lawyers are trying to get disclosure of records of his good buddy Kinsella (the Swordsman).
How is it that they are allowed to constantly do this to us? Governments are not supposed to be brown nosing the business as much azs the BC Liberal's and Fed Conservatives do.
crime rates are going to go up if these people are allowed to continue down their rediculous path of selling off all our Crown Corporations and then gven everything to Private business who do not have any care about their workers, consumers or people at the top.
How is our corrupt Government allowed to continue? Aren't there laws to protect the people anymore?
I wonder when people who vote liberal will wake up to the fact thay they are being screwed just like the rest of us?
After all is said and done, prices on a whole bundle of goods and services just went up 7%.
That should spur the economy, all right.
Thanks Bill...I was wondering just that this morning while singing in the shower
We never eat in restaurants any more We also used to tip pretty good too. That's history. We don't trust the food that is being served. How much of their food is outsourced. Like the old days the best food you could eat was what you were served right at home.
Campbell might find it hard to accept that we don't have alcohol with our meals either.
A economist mentioed this evening that the average BC family will lose around 1,000 dollars each. He went on to say that one other province returned 1,000 to each family. Can anyone see Gordo doing that? Of course not. When I see pictures of old ladies going to the Food Bank (because she has no food in the old refrigerator,) complete with a walker it almost makes me weep.Then I get angry. We have a ruthless man as our Premier.
http://www.ipetitions.com/petition/stoptheHST
Stop this tax grab, over 150 signatures in just a few hours. Lets show Campbell that British Columbians run this province, not his big business cronies.
Oh no....us poor consumers will get hurt. I am so afraid. How will BC survive ?
we're in a major recession, almost a depression (And no we're haven't bottomed out yet).
And Gordo raises consumer taxes?
Talk about putting another damper on consumer spending.
If I was a small business person sush as a restaurant owner or a hair dresser I'd be choked.
This tax hike does make me less inclined to go out for meals. I'm pulling back my spending and saving more.
And Gordo wants the 1.6 billion from the feds to off-set his huge budget deficit.
And we'll still see massive service cuts, libraries and social service agencies are already being foreshadowed.
God help us.
Harper made a serious error in reducing the GST. He cannot balance the books and the GST revenue, along with his massive corporate tax reduction is making him look bad (a seriously bad economist!). His solution is to have all the provinces harmonize the PST. Once the provinces have more revenue from this harmonization, then he can reduce the money flow from the feds to the province. Ontario is on board, and now BC. This is not surprising at all. I wonder what Alberta will do?
And so - as the NDP morphs into an anti-tax party - who will stand up for human rights, and government providing service for the people?
surely not the liberals or greens!
who do you think is going to pay for all the good things we have in this province? I say yeah for taxes
To Jeff and Anonymous 10:49 - you misunderstand completely what is happening with the HST!
I'll be writing on this Tuesday in 24 hours and the Tyee and of course here, but the short version is that this is the most enormous transfer of taxation from businesses to individuals we've yet seen!
It is also a highly regressive tax - that is, it disproportionately impacts lower income earners because far more of their limited income will be spent paying the tax.
A progressive tax increase would be far more desireable if a tax increase is needed to pay for public services. That way the burden falls more fairly on those with great income.
Job creation? Give me a break! This is a pure tax grab and transfer.
Take restaurant meals - currently consumers pay no Provincial Sales Tax on the food portion - only on alcohol sales.
After the HST comes in, you will pay an extra 7% on the food - and guess what happens?
Restaurant sales go down. Servers and staff see reduced sales AND reduced tips.
Take my own consulting business - I currently am obliged to charge the 5% GST on services.
With the HST I will have to charge a massive 12% on services - an increase in taxation of more than 100% and for no, repeat, no change in anything I or my clients do!
The same goes for lawyers, architects, accountants etc - every one of them has to charge an extra 7% - and guess who will pay?
The only benefits are for big businesses that can flow through the costs to their customers!
I suspect that Gordie may be having either, a rebellion and or mutiny on his hands over his HST brain fart idea, let alone the Libels BCR problems. I betcha, that by Wed July 29 this HST bullsh!t is dumped.
I have heard it might be time for a boycott of all non-essential items (including restaurant food) as well as a peaceful labour day march on all BC Liberal MLA offices. A few weeks of this sort of thing and Campbell's corporate masters just may offer him up as a sacrifice (metaphorically, of course).
http://www.petitionspot.com/petitions/BCANTIHST
Hey BC... Your getting shafted by the lib's again! Join me in a online petition i have started to show how much we dont like the lib's BS... ENOUGH IS ENOUGH, ALL THIS WILL DO IS KILL THE ECONOMY AND THE LOW-INCOME PEOPLE
NO TO HST!!!!
http://www.youtube.com/watch?v=atiLnxSKmec
#4 comedy video in Canada yesterday - pulp fiction parody.
Post this video on your blog and share it with friends. The only way to stop the HST is to show
what a joke it is.
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