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.

Just Posted

Saanich wants bunkers to be off limits for cannabis growing

Saanich looks to block cement bunkers on ALR farmland

UPDATE: Missing Langford teen found safe

The 13-year-old Langford boy reported missing Wednesday has been found

Victoria police seize over one kilo of fentanyl, guns and cars

Andrew Ritch is facing charges of drug trafficking and firearm offences

Fire chief stops driving lesson to fight fire

Sooke fire concerned over second suspicious bin fire this year

Tour de Victoria rolls through the region Saturday

Expect traffic delays across Greater Victoria on Aug. 18

B.C. wildfires 2018: Hazy skies impacting crews in spotting new fires

18,000 people are on an evacuation alert, with 3,000 homes under an evacuation order

Minister optimistic after 2 days of Columbia River Treaty negotiations

Canadian and U.S. officials met in Nelson Wednesday and Thursday to discuss future of the treaty

Man dies in B.C. police cell while awaiting court hearing

An independent investigation is underway after a man died while in Penticton police custody Aug. 16

RCMP appeal for tips, dashcam footage in German tourist shooting west of Calgary

The Durango crashed into the ditch after the shooting near the Goodstoney Rodeo Centre

2 nurses attacked at B.C. psych hospital, union calls for in-unit security

PHSA says that in-unit guards would do more harm than good

Former B.C. optician won’t be jailed for sexually assaulting minor

Kenneth Pilkington sentenced to 24 months’ probation for offence three decades ago

Red Cross now accepting donations for those impacted by B.C. wildfires

The Canadian Red Cross is asking for help now and in the weeks and months ahead.

B.C. program to educate parents reduces ‘shaken baby syndrome’ by 35%

Period of PURPLE Crying was launched nearly a decade ago

UPDATED: Vancouver Island community under evacuation alert due to wildfire

BC Wildfire Service says steep terrain near Zeballos poses challenge as “out of control” wildfire approaches homes

Most Read