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

The last forum before the election on Saturday focused on health care.
Boundary-Similkameen candidates talk health care over digital forum

The Support Our Health Care Society hosted the forum

COVID-19. (Image courtesy CDC)
Interior Health reports 18 COVID-19 cases, highest daily count since July

The total of COVID-19 cases in the region is now at 662

A Kelowna clinic decided to immunize their patients in a drive-thru flu clinic earlier this month. (Twila Amato - Black Press Media)
Interior Health anticipates increase in flu vaccinations this season

Some 300,000 doses of flu vaccine ready for distribution across Southern Interior

A truck and trailer left Reservoir Road north of Penticton earlier on Oct. 23. (Facebook)
UPDATE: Highway 3 closed east of Osoyoos

Police have re-opened Highway 33 at Idabel Lake

Snowfall in the Okanagan shatters records. (Contributed)
Snowfall in Okanagan breaks records dated back to 1899

Penticton has received over 10 cm today, surpassing the 8 cm record set in 1957

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

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Thanks to efforts by a Kelowna shelter and Elections BC, anyone who wishes to can vote in the 2020 BC Provincial Election, even if they don’t have a fixed address. (THE CANADIAN PRESS/Darryl Dyck)
Kelowna group ensures people experiencing homelessness can vote

Shelter supervisor says voting ‘a fundamental right’ even for those without a fixed address

The Regional District of Okanagan Similkameen is planning to implement transit service in the West Bench area in September, 2021. (Black Press file photo)
Regional district to bring transit service to West Bench in 2021

Residents of area near Penticton will be consulted before plans are finalized

(Big White Ski Resort photo)
Big White receives 21 cm of snow in 24 hours

Resort’s snow base 41 cm deep, one month until opening day

The deer were allegedly shot within Princeton town limits, late at night. Black Press File Photo.
Armed man, in full camouflage, allegedly shoots deer in downtown Princeton

‘The list of charges goes on and on,’ said RCMP Sgt. Rob Hughes

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

Members of Summerland council and municipal staff were present on Oct. 22 to officially open the expanded Summerland landfill facility. From left are manager of environmental services Candace Pilling, Coun. Erin Carlson, Coun. Marty Van Alphen, acting mayor Doug Holmes, Coun. Richard Barkwill and Coun. Erin Trainer. (John Arendt - Summerland Review)
Changes made to entrance of Summerland landfill

Upgrades came at cost of $500,000

Most Read