10% HST cheaper than PST, study finds

A 10 per cent harmonized sales tax will cost an average B.C. family $255 a year less than returning to the former provincial sales tax, according to a new study.

Fight HST organizers Bill Vander Zalm and Bill Tieleman visit Elections BC office in Victoria Wednesday. They want the B.C. government to allow people to vote late if they didn't receive their HST referendum packages in time.

VICTORIA – A 10 per cent harmonized sales tax will cost an average B.C. family $255 a year less than returning to the former provincial sales tax, according to a new study.

David Murrell, professor of public finance at the University of New Brunswick, released the first version of his study last year, examining the switch to the HST in B.C. and Ontario. He calculated a 12 per cent HST would cost an average B.C. family an extra $490 in new sales taxes paid. Factoring in low-income tax credits and grants, the B.C. HST would mean an net $320 tax increase.

After the B.C. government announced it would reduce the HST rate to 11 per cent next year and 10 per cent in 2014, Murrell updated his calculations and released the results this week.

“If I were a B.C. voter, based on this evidence, I would vote ‘no’ in the HST referendum,” Murrell said.

Murrell did a similar study in 1997 when Nova Scotia, New Brunswick and Newfoundland expanded their provincial sales tax to include services, and cut the rate to eight per cent. He also found a net saving to taxpayers in those provinces.

B.C. consumer savings come from three sources, Murrell said. Goods that were subject to PST will now have it reduced to five per cent. The government has offered personal income tax credits to help compensate for the new HST. And businesses pass on savings from writing off taxes on material inputs and capital spending, lowering the price of products and services.

Jock Finlayson, vice-president of the Business Council of B.C., said Murrell’s study is the first independent academic analysis he has seen since the HST rate cut option was announced in May.

Finlayson said he has heard many times that people don’t believe prices will be reduced as a result of HST tax breaks. But independent researchers have looked at the switch from retail sales taxes to value-added taxes around the world, and “without exception” they find that lower prices result, he said.

With the Aug. 5 deadline for voting in B.C.’s HST referendum approaching, Fight HST organizers Bill Vander Zalm and Bill Tieleman visited Elections BC facilities where they will observe as ballots are counted.

They told reporters they have heard from hundreds of people concerned they won’t receive a voting package in time to participate, and called for the government to intervene and establish a mechanism to allow late voting.

“If [voters] called Elections BC and they were sent a package, it should get to them and they should be allowed to vote,” Tieleman said.

Finance Minister Kevin Falcon, reached at a cabinet retreat in the Okanagan, said it is “ridiculous” to suggest that the government try to interfere with an independent office that has successfully supervised many elections and referendum votes.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

ALBERNI GOLF: First scramble of the 2020 season a success

60 golfers participated in the J & L Mixed Scramble

Kuu-us Crisis Line Society hands out hygiene kits in Port Alberni

Kuu-us and Salvation Army team up to bring food, hygiene kits to those who need them

Port Alberni RCMP look for witnesses of daytime assault

A woman was assaulted while jogging in North Port

Racist incident shocks Tseshaht First Nation

Port Alberni RCMP looking for information

Federal government says no to relaxing log export rules

News comes after Steelworkers, Mosaic ask for ‘temporary relief’ on log export policy

If Trudeau won’t stand up to Trump, how will regular people: Singh

Trudeau did not directly answer a question about Trump’s actions amid protests

An ongoing updated list of Alberni Valley events affected by COVID-19

Has your event been cancelled or postponed? Check here

Police look for suspect after alleged assault at gas station in Nanaimo

Victim says he was punched in the head several times in late April at business in South Wellington

As two B.C. offices see outbreaks, Dr. Henry warns tests don’t replace other measures

Physical distancing, PPE and sanitizing remain key to reduce COVID-19 spread

Bank of Canada keeps key interest rate target on hold at 0.25%

Central bank now expects GDP to decline between 10 and 20 per cent compared with the fourth quarter of 2019

Friendly Cove and Kyuquot will remain closed until further notice

Transition of other B.C. communities will be monitored before a decision to ease restrictions

Gold River organizes a shop local initiative to creatively boost economy

Local purchases can earn shoppers $200 gift certificates to be spent on businesses within Gold River

Young killer whale untangles itself from trap line off Nanaimo shore

DFO marine mammal rescue unit was en route as whale broke free from prawn trap line

RCMP, coroner investigate murder-suicide on Salt Spring Island

Two dead, police say there is no risk to the public

Most Read