The move to scrap the Harmonized Sales Tax could end up costing school districts millions of dollars if the provincial government decides to not to offer them a rebate on the provincial sales tax they pay.
Maple Ridge-Pitt Meadows Board of Education chair Ken Clarkson said he wants the provincial government to make the switch back to the GST/PST revenue neutral for school districts, instead of downloading the cost on to school boards.
As part of the HST, school districts were given a 79 per cent rebate on sales taxes they paid, including an 87 per cent of the provincial portion of the tax.
“It ended up being a better deal for school boards,” said Clarkson.
Previous to HST’s implementation, school districts were given a rebate by the federal government on GST paid. However, no such rebate was offered by the province on PST paid. Should the province revert to the old formula, there could be a serious financial hit to the local school district as a result.
“We don’t know the exact amount, but it will be detrimental, and will cost us more if we go back to old formula,” Clarkson said.
Last month, the Vancouver School Board sent a letter to the provincial Ministry of Education, stating the move back to the GST/PST would cost that district more than $850,000 annually.
The Vancouver School Board is leading the call for a PST rebate. The B.C. School Trustees Association will be discussing the issue at its provincial council meeting later this month, when it will vote to formally request the province ensure districts won’t have to pay more under PST/GST. The government is still planning the transition back to the GST/PST, and no decision has yet been made regarding a PST rebate, Clarkson notes.