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

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

Just Posted

Online reservation service, First Table, allows Victoria diners to have dinner at half-price if they’re willing to be flexible about when they go. (Black Press Media file photo)
New reservation service allows Victoria residents to dine out at half price

First Table gives Victoria diners 50 per cent off when they book tables during off-peak hours

Kwick’kanum (Eric Pelkey), a hereditary chief of the Tsawout Nation, addressed the crowd that gathered at Mount Newton Cross Road and Highway 17 on Oct. 23. (Devon Bidal/News Staff)
UPDATED: Pat Bay Highway reopens after rally supporting Mi’kmaq fishing rights

Supporters call on government to recognize Indigenous treaty rights

Sooke man Rik Downer spent two weeks in the Royal Jubilee Hospital after contracting flesh-eating bacteria. (Nina Grossman/News Staff)
Sooke man’s bumped knee leads to fight for life

Man unknowingly contracts case of rare flesh-eating disease

Const. Graham Walker of the Saanich Traffic Safety Unit recreates an incident involving a driver who police say attempted to film the scene of a crash while driving up Highway 17. (Saanich Police/Twitter)
Police track down driver caught filming accident scene on Pat Bay Highway

Driver issued $368 ticket, points on their licence

B.C. provincial health officer Dr. Bonnie Henry gives a daily briefing on COVID-19 cases at an almost empty B.C. Legislature press theatre in Victoria, B.C., on March 25, 2020. (Don Craig/B.C. government)
B.C. sees 223 new COVID-19 cases, now 2,009 active

Two new care home outbreaks in Surrey, Burnaby

Advance polls are open from Oct. 15 to 21 with election day on Oct. 24. (Black Press Media file photo)
100 Mile Conservation officer Joel Kline gingerly holds an injured but very much alive bald eagle after extracting him from a motorist’s minivan. (Photo submitted)
B.C. driver thought he retrieved a dead bald eagle – until it came to life in his backseat

The driver believed the bird to be dead and not unconscious as it turned out to be

Chastity Davis-Alphonse took the time to vote on Oct. 21. B.C’s general Election Day is Saturday, Oct. 24. (Chastity Davis-Alphonse Facebook photo)
B.C. reconciliation advocate encourages Indigenous women to vote in provincial election

Through the power of voice and education Chastity Davis-Alphonse is hopeful for change

White Rock RCMP Staff Sgt. Kale Pauls has released a report on mental health and policing in the city. (File photos)
White Rock’s top cop wants to bill local health authority for lengthy mental-health calls

‘Suggestion’ included in nine-page review calling for ‘robust’ support for healthcare-led response

A Le Chateau retail store is shown in Montreal on Wednesday July 13, 2016. Le Chateau Inc. says it is seeking court protection from creditors under the Companies’ Creditors Arrangement Act to allow it to liquidate its assets and wind down its operations.THE CANADIAN PRESS/Ryan Remiorz
Clothing retailer Le Chateau plans to close its doors, files for CCAA protection

Le Chateau said it intends to remain fully operational as it liquidates its 123 stores

Green party Leader Sonia Furstenau arrives to announce her party’s election platform in New Westminster, B.C., on October 14, 2020. THE CANADIAN PRESS/Jonathan Hayward
B.C. Green party says it’s raised nearly $835,000 in 38 days

NDP Leader John Horgan is holding his final virtual campaign event

U.S. border officers at the Peace Arch crossing arrested two men on California warrants this week. (File photo)
Ottawa predicts system delays, backlogs unless court extends life of refugee pact

Canada and the United States recognize each other as safe places to seek protection

Most Read