LANGLEY, B.C. — Debate in B.C. over the HST has hit an emotional button for a public that already feels burdened by taxes, the B.C. Trucking Association says good things will come out of the new tax system.
As two provinces prepare to usher in an era of Harmonized Sales Tax on July 1, the reactions couldn’t be more different.
While Ontarians seem to have a muted acceptance to see the HST, a number of British Columbians are fighting to halt the same process. Both provinces plan to follow in the footsteps of the Maritime provinces and Quebec, where the singular HST has replaced having both a PST and the GST.
Public outrage over the proposed tax in B.C. has led to numerous rallies and an anti-HST petition campaign spearheaded by a former premier of the province, Bill Vander Zalm.
Much of the scepticism in B.C. can likely be traced to two factors: the HST was a measure the province’s Liberal government opposed before getting re-elected last May, but announced the move shortly after winning a majority; and there’s been confusion as to what goods are included and what goods are exempted from the HST.
There’s not much you can say about the first point, but as for the second point, the B.C. government says a list of what’s taxable will be issued soon, similar to what the Ontario government produced.
But the BCTA says the rest of the HST debate hasn’t been about the facts. Instead, it’s focused on the notion that the HST will help “business” while penalizing “the public.”
“This sort of broad generalization is both divisive and inaccurate,” says Paul Landry, president and CEO of the BCTA. “Like any tax initiative, there will be winners and there will be losers. Some businesses will be worse off and some individuals and families will be better off.
“But, over time, most British Columbians will benefit from the economic lift of the HST in the form of capital investments, productivity improvements, increased domestic and international competitiveness, more jobs and higher wages.”
The introduction of the HST will reduce taxes on new investments by small businesses by over 50 percent in 2010, which Landry says, makes B.C.’s taxes on capital investment lower than those of all the other provinces except Nova Scotia, New Brunswick and Newfoundland, which already have the HST, as well as a handful of countries B.C. competes with internationally.
For the trucking industry specifically, access to capital can be a challenge. Landry expects that by the time the HST is introduced in July 2010, many trucking companies will have deferred investments in new equipment for several years due to recessionary pressures.
“With the economy recovering, there is pent-up demand for new equipment and the HST will grease the wheels of renewal,” he says. “Also, the economic boost caused by the HST will create more demand for trucking services, thus creating jobs in this key sector.”
Landry foresees different scenarios in the short term and the long term, but both of them he predicts will be beneficial to the province’s economy overall.
“In the short term, the HST will increase prices on some consumables but, as was the case in the Atlantic Provinces that adopted the HST, reduced costs of production induced by the HST should mitigate the effect of these increases,” he notes.
“In the longer term, increased productivity and domestic and international competitiveness, accelerated job creation and higher wages should more than close any remaining gap,” he adds.
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