Soft drinks are exempted from provincial sales tax along with other grocery store items. (Wikimedia Commons)

Extend sales tax to soft drinks, B.C. advisory group says

Province not extending PST, or scrapping homeowners grant

A B.C. government tax fairness advisory panel has recommended extending provincial sales tax to all non-alcoholic beverages except for milk and plain water.

The task force, set up to look at alternatives to Medical Services Plan premiums, also recommends eliminating the homeowner grant and replacing it with a refundable tax credit.

The report, completed in March, was released Thursday by the finance ministry without comment on the recommendations. It says soft drinks should never have been exempted from PST along with the rest of foods, because they have little nutritional value.

The report also recommends introducing a “value added tax” similar to the harmonized sales tax that was rejected in a province-wide referendum.

The finance ministry issued a statement Thursday saying that the drinks tax, changes to the homeowner grant or changing the PST to make it similar to the harmonized sales tax are not being considered.

The task force noted in its interim report that a payroll tax to replace MSP premiums would affect business competitiveness. Finance Minister Carole James has moved to implement the payroll tax next January, while cutting MSP premiums by half at the same time.

The report calls the homeowner grant for property taxes a “regressive feature of the tax system that is fundamentally unfair and would be improved by using the income system to provide more progressive tax relief to homeowners and renters.”

It recommends an enhanced sales tax credit and carbon tax credit for lower income people, funded by the revenue from extending PST to most non-alcoholic beverages.

The report was produced by University of Victoria professor Lindsay Tedds, UBC professor David Duff and former NDP finance minister Paul Ramsey. The task force was set up last fall to find ways to replace government revenues lost due to eliminating MSP premiums. That was pre-empted by James’ February budget, which imposed a payroll tax.

The “employers health tax” takes effect in 2019 at 1.95 per cent of payroll for businesses and organizations with payrolls of more than $1.5 million. A lower rate applies for payrolls between $500,000 and $1.5 million, and those below $500,000 are exempt.

The payroll tax applies whether employers pay their employees’ MSP premiums or not. James emphasized that while property taxes may go up, individuals stand to save $800 a year or more if they have been paying their own MSP premiums.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Almost four of 10 Canadians have unlimited internet data at home

Fifty-four per cent say they telecommute at least sometimes

Student Voice: Saanich students launch competitive robotics team

The Reynolds Reybots plan to share their skills with middle schools

Esquimalt needs urgent health care facility, mayor says

A severe doctor shortage is leaving Esquimalt residents scrambling for health care

Royal BC Museum’s newest series takes visitors behind the scenes

Adult sessions explores art, nature, history and more

Saanich councillor calls for interim Garry oak protection from development

Development in Saanich needs no environmental permits

What are the worst parking spots in Victoria?

We are looking for the worst places in the city to park and need your opinion

Women’s March returns across the U.S. amid shutdown and controversy

The original march in 2017, the day after President Donald Trump’s inauguration, drew hundreds of thousands of people

Greater Victoria Crime Stoppers wanted list for the week of Jan. 15

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

POLL: Should people have to license their cats?

The Victoria Natural History Society has sent letters to 13 municipalities in… Continue reading

Federal Liberals announce former B.C. MLA as new candidate in byelection

Richard Lee will face off against federal NDP leader Jagmeet Singh

No winning ticket in $10 million Lotto Max jackpot

No win in Friday night’s draw means the next Lotto Max draw will be approximately $17 million

Scientists ID another possible threat to orcas: pink salmon

For two decades, significantly more of the whales have died in even-numbered years than in odd years

Burnaby byelection turmoil sparks debate about identity issues in politics

The Liberals still have not said whether they plan to replace Wang, who stepped aside Wednesday

Rookie Demko backstops Canucks to 4-3 win over Sabres

Young Vancouver goalie makes 36 saves to turn away Buffalo

Most Read