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.

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

Port Hardy council has agreed to cancel Canada Day celebrations in wake of the discovery of the remains of 215 children being found on the grounds of a former residential school. (North Island Gazette file photo)
Council votes to cancel Canada Day celebrations in wake of mass grave sites being found

Coun. Treena Smith made the motion for the chamber to not host Canada Day celebrations this year

Port Hardy Fire Rescue responded to an early morning fire around 3:50 a.m. on Sunday, June 13. Two porta-potties were on fire at the Visitor’s Centre on Hastings Street. Anyone with information is asked to contact the RCMP at 250-949-6335. (Port Hardy Fire Rescue photo)
Firefighters respond to early morning fire near visitor centre in Port Hardy

Two porta-potties were on fire at the Visitor’s Centre on Hastings Street

North Island MLA Michele Babchuk. Photo contributed
COMMENTARY: MLA Michele Babchuk talks the future of forestry

‘These forests are important to every single one of us, myself included’

Dr. Prean Armogam hands over a cheque for $10,000 to Hardy Bay Senior Citizens Society president Rosaline Glynn. The money will be going towards a new roof for the Port Hardy seniors centre. This is the second donation Dr. Armogam has made to the society, giving them $5,000 a little over a year ago. (Tyson Whitney - North Island Gazette)
Doctor donates $10k to Hardy Bay Senior Citizens Society for new roof

This was the second donation Armogam has given to the society

New COVID-19 cases on Vancouver Island by local health area for the week of May 30-June 5. (B.C. Centre for Disease Control image)
COVID-19 cases drop again almost everywhere on Vancouver Island

Nanaimo had four new cases last week, down from 22 the week before

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Creative handmade signs abound at the June 13 Tofino rally for old growth trees. (Nora O’Malley photo)
VIDEO: Tofino stands in solidarity for Fairy Creek Blockades

Over 150 supporters attend rally hosted by Friends of Clayoquot Sound

FILE – Provincial health officer Dr. Bonnie Henry talks about B.C.’s plan to restart the province during a press conference at Legislature in Victoria, Tuesday, May 25, 2021. THE CANADIAN PRESS/Chad Hipolito
B.C. officials watching U.K.’s Delta variant struggles, ‘may need to slow’ restart plan

Studies show that one dose of vaccine is only 33 per cent effective in preventing B.1.617.2 spread

RCMP Const. Shelby Patton is shown in this undated handout photo. RCMP say that Patton was hit by an allegedly stolen truck that he had pulled over on Saturday morning in Wolseley, east of Regina. THE CANADIAN PRESS/HO, RCMP
Pair charged in Saskatchewan Mountie’s death make first court appearance

Const. Shelby Patton was hit by an allegedly stolen truck that he had pulled over Saturday morning

David and Collet Stephan leave for a break during an appeal hearing in Calgary on Thursday, March 9, 2017. THE CANADIAN PRESS/Todd Korol
Appeal Court rejects stay for Alberta couple facing third trial in son’s death

Pair accused in their earlier trials of not seeking medical attention for their son sooner

Highway notices like this come down effective June 14. Public health restrictions on non-essential travel and commercial operation have hit local businesses in every corner of B.C. (B.C. government)
Province-wide travel back on in B.C.’s COVID-19 restart plan

Gathering changes include up to 50 people for outdoor events

Calgary Stampeders’ Jerome Messam leaps over a tackle during second half CFL western semifinal football action in Calgary, Sunday, Nov. 15, 2015.THE CANADIAN PRESS/Jeff McIntosh
CFL football will be played this summer in Canada

Governors vote unanimously in favour to start the ‘21 campaign on Aug. 5

Citizenship Minister Marco Mendicino holds a press conference in Ottawa on Thursday, Nov. 12, 2020. The federal government is announcing that Indigenous people can now apply to reclaim their names on passports and other government documents. THE CANADIAN PRESS/Sean Kilpatrick
Indigenous people can now reclaim traditional names on their passports and other ID

Announcement applies to all individuals of First Nations, Inuit and Métis background

Harvesting hay in the Fraser Valley. (Tom Fletcher/Black Press)
COVID-19: B.C. waives farm income requirement for a second year

Property owners don’t need minimum income for 2022 taxes

Most Read