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

New protocol will better assist victims of sexual assault

Victims of sexual assault are set to benefit from the completion of… Continue reading

Board of Education hires independent consultant to review SD82 reassignments

Review will not change recent decisions but will gather input, says board chair

Prince Rupert marine business adds second catamaran to its fleet

100-passenger Aurora was launched this year for the Rio Tinto Kemano tunnel project

Terrace-area gold project shows strong promise

Juggernaut Exploration hopes this year’s drilling will follow last year’s exceptional program

School district remains firm on reassignments

Community calling for halt of decision

VIDEO: Acknowledging skeptics, finance minister vows to build Trans Mountain project

Bill Morneau said he recognizes ‘huge amount of anxiety’ in Calgary over future of oil and gas sector

B.C. Maxim Cover Girl semi-finalist victorious despite second-place finish

Brandi Hansen says her main goal was to spread an empowering message to others

Home care for B.C.’s elderly is too expensive and falls short: watchdog

Report says seniors must pay $8,800 a year for daily visits under provincial home support program

B.C. ‘struggling’ to meet needs of vulnerable youth in contracted care: auditor

Auditor general says youth in contracted residential services may not be getting support they need

Pair of B.C. cities crack Ashley Madison’s ‘Infidelity Hotlist’

Data from the website reveals Abbotsford and Kelowna hottest spots for cheaters

Life’s work of talented B.C. sculptor leads to leukemia

Former Salmon Arm resident warns of dangers of chemical contact

Billboard posted along B.C.’s Highway of Tears to remember missing and murdered Indigenous women

Billboards featuring Indigenous artwork to be placed in Surrey, Kamloops and near Prince George

Federal cabinet ministers visit Edmonton, Calgary, in wake of TMX approval

Natural Resources Minister Amarjeet Sohi is set to visit Trans Mountain Corp.’s terminal in Edmonton

B.C. municipality prepares to forbid overnight camping by homeless despite court ruling

While courts have ruled against blanket bans, Langley City is employing a site-by-site approach

Most Read