The B.C. Chamber of Commerce was in town Tuesday to try to get the local chamber to back the proposed TransLink half-per-cent increase in the provincial sales tax.
Maple Ridge-Pitt Meadows Chamber of Commerce president Terry Becker, though, wasn’t ecstatic about the idea.
Speaking personally, before the board endorsed any position, Becker said she didn’t like any increase in tax.
“What I’d like to see here is what will be the increase in expenses to the small business owner.”
The B.C. chamber supported the proposal after it was announced by the mayors as a way to fund part of the $7.5-billion plan for TransLink for the next decade. Metro Vancouver voters will show in a spring referendum whether they support the idea.
The B.C. Chamber is part of the Better Transit and Transportation Coalition, composed of the Vancouver Board of Trade, Tourism Vancouver, and Downtown Surrey Business Improvement Association.
Metro Vancouver voters now have the chance to decide between a strong economy and job creation or more traffic congestion and less service, said John Winter, B.C. chamber executive.
Local businesses aren’t as enthusiastic.
“My personal thought is, any increase in the PST is going hurt businesses in the Lower Mainland,” said Bryan Hutton, with Canadian Tire in Maple Ridge.
It’s difficult to tell what will motivate people to leave Metro Vancouver and go to the U.S. in search of better prices.
In addition to the higher prices, businesses also have to go through another tax change, one that won’t be faced by businesses east of Langley or Maple Ridge. Goods being sold in Abbotsford and Mission, for example, would only see the seven-per-cent sales tax, while in Metro Vancouver the tax rate would be 7.5 per cent, assuming voters approve the higher tax in a plebiscite this spring.
“It’s just one huge confusion. Personally, I don’t think anybody is going to vote for it,” Hutton said.
Scott Jones, general manager of West Coast Toyota, said the higher levy will remove the incentive for buyers from the Fraser Valley or Interior to shop in Metro Vancouver. A car buyer could save $150 on a $30,000 vehicle by shopping in Abbotsford.
“Why wouldn’t they? If I’m a Maple Ridge business, how am I going to compete on big-ticket items when the consumer can drive 20 minutes and not pay the .5 per cent PST? It makes no sense whatsoever.”
And where will the shopper go, to the Costco in Abbotsford or the one in Coquitlam, where he or she will pay 7.5 per cent PST on non-food items.
If businesses absorb that in an effort to keep customers, it means subsidizing a sale.
“For big-ticket items, it’s definitely not a level playing field,” Jones said.
It would make more sense to charge the extra half per cent throughout the Fraser Valley as far as Hope, he added.
However, Mike Zimmerman at Haney Automotive didn’t see much effect.
“I don’t think a half per cent is going to cause any of our customers to go anywhere.”
On a $1,000 repair job, the extra tax will add another $5 to the bill.
“Our business grows based on reputation.”
The coalition came out in support of more funding for TransLink before the PST increase was endorsed by the mayors’ council on Dec. 11.
The coalition has created a pledge for other groups who support the tax to sign. The pledge says that a yes vote for more TransLink funding will “strengthen our economy, reduce pollution, improve the health of our communities and make this region a more affordable place to live.”
Allan Asaph of the Abbotsford chamber of commerce said it supports the coalition in calling for more TransLink funding.
That’s not because Abbotsford businesses are expecting a windfall as shoppers flee Metro Vancouver, but because it’s a reasonable funding solution, Asaph added.
The Langley-Abbotsford border and the Maple Ridge-Mission border are the also the boundaries of Metro Vancouver.
“I think the impact of shift in consumer spending is being over stated.”
Some big-ticket items will be cheaper, but Metro Vancouver retailers can use that as a marketing tactic. There’s been no growth in the number of gasoline stations in Abbotsford, even with gas prices 10 cents a litre cheaper in Abbotsford, he pointed out.
And some high-end auto dealers in Metro Vancouver don’t even exist in the Fraser Valley.
“The proposal is a reasonable approach. It certainly spreads the cost across the widest possible spectrum,” Asaph said.
For most purchases, an extra half a per cent won’t make a difference, and, overall, he added, improving transportation in Metro Vancouver will improve transportation in the Fraser Valley.