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. 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

Just Posted

After clocking in at 207km/hr in Maple Ridge, the driver’s car was impounded, and their licence was suspended. (File photo)
Speedster busted travelling 127 km/hr over limit in Maple Ridge

RCMP nabbed the offender on Lougheed Highway and 287 Street this weekend

Building Interfaith Bridges organized a special crossing of Dewdney Trunk Road in commemoration of the Afzaal family who were killed in London, Ontario. (Special to The News)
Group marches across Maple Ridge intersection for Muslim family killed in Ontario

Participants dressed in traditional outfits to create awareness against Islamophobia

Submit letters to the editor through our website, via email or in writing.
LETTER: Old-growth logging tip of a much bigger issue

Letter writer erects flagpole and fly national and provincial flags upside down as sign of distress

A rendering of the proposed six-storey apartment building on Dewdney Trunk Road. (Billard Architecture)
Green rooftop planned on Maple Ridge condo building

Council considers 127-unit apartment building on Dewdney Trunk Road

COVID-19. (Image courtesy CDC)
Maple Ridge high school has COVID-19 exposure

Westview secondary is latest listed by Fraser Health

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Montreal Canadiens goaltender Carey Price (31) is scored on by Vegas Golden Knights defenseman Alec Martinez, not pictured, during the second period in Game 1 of an NHL hockey Stanley Cup semifinal playoff series Monday, June 14, 2021, in Las Vegas. (AP Photo/John Locher)
Habs fall 4-1 to Vegas Golden Knights in Game 1 of NHL semifinal series

Match was Montreal’s first game outside of Canada in 2021

Kelowna-Lake Country MLA Norm Letnick, assistant deputy speaker at the B.C. legislature, presides over committee discussions. The legislature is completing its delayed spring session this week, with most MLAs participating by video conference. (Hansard TV)
B.C.’s daily COVID-19 infections dip below 100 over weekend

Only 68 new cases recorded Monday, four additional deaths

Robert Nelson, 35, died after being stabbed at a homeless camp in Abbotsford on April 7 of this year.
Mom pleads for information about son’s killing at Abbotsford homeless camp

Robert Nelson, 35, described as ‘man who stood for justice, honour, respect’

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

The BC Ferries website went down for a short while Monday morning following a provincial announcement that recreational travel between health authorities can resume Tuesday. (Black Press Media file photo)
BC Ferries’ website crashes in wake of provincial reopening announcement

Website back up now, recreational travel between health regions to resume as of Tuesday

The Kamloops Indian Residential School is photographed using a drone in Kamloops, B.C., Monday, June, 14, 2021. The remains of 215 children were discovered buried near the former school earlier this month. THE CANADIAN PRESS/Jonathan Hayward
Communities grapple with what to do with former residential and day schools

Some tear them down as a tool to help healing, others repurpose them as tools for moving forward

Police arrest the suspect in an attempted armed bank robbery on June 2 at the Scotiabank at Gladwin Road and South Fraser Way in Abbotsford. (Photo by Garry Amyot)
Abbotsford bank robbery suspect who was stopped by customers faces more charges

Neil Simpson now faces total of eight charges, up from the initial two

FILE – Provincial health officer Dr. Bonnie Henry talks about B.C.’s plan to restart the province during a press conference at Legislature in Victoria, Tuesday, May 25, 2021. THE CANADIAN PRESS/Chad Hipolito
B.C. watching U.K.’s COVID struggles but don’t think province will see similar pitfalls

Studies show that one dose of vaccine is only 33 per cent effective in preventing B.1.617.2 spread

Most Read