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

B.C. BUDGET: Surplus $374 million after bailouts of BC Hydro, ICBC

Growth projected stronger in 2020, Finance Minister Carole James says

First residents move into Nuxalk Nation’s tiny homes

Four of the tiny homes are now complete and residents have moved in

Province announces $100-million grant funding for Northwest communities

The Northern Capital and Planning Grant will go to four regional districts and 22 municipalities

All Native Basketball Tournament Day 5: Recap

Highlights and results from day 5 at the All Native Tournament

‘Our entire municipality is heartbroken’: Seven children die in Halifax house fire

A man and woman remained in hospital Tuesday afternoon, the man with life-threatening injuries

‘Bullet missed me by an inch’: Man recounts friend’s killing at Kamloops hotel

Penticton man witnessed Summerland resident Rex Gill’s murder in Kamloops

B.C. BUDGET: Income assistance raise still leaves many below poverty line

$50 per month increase included in funding for poverty and homelessness reduction

B.C. BUDGET: Indigenous communities promised billions from gambling

Extended family caregiver pay up 75 per cent to keep kids with relatives

B.C. BUDGET: New benefit increases family tax credits up to 96 per cent

BC Child Opportunity Benefit part of province’s efforts to reduce child poverty

B.C. BUDGET: Carbon tax boosts low-income credits, electric vehicle subsidies

Homeowners can get up to $14,000 for heating, insulation upgrades

B.C. man survives heart attack thanks to Facebook

A Princeton man suffered a heart attack while at an isolated property with no cell service

B.C. man sues Maxime Bernier’s People’s Party over trademark

Satinder Dhillon filed application for trademark same day Maxime Bernier announced the new party

Minister says plans to fight poverty, climate change, focus of B.C. budget

The NDP said in its throne speech last week that affordability will be the hallmark of its initiatives

Most Read