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

Some Hope school buses will soon have seatbelts

Parents asked to encourage children to comply with new safety rules

Threats to the Fraser River at a ‘new zenith,’ says river conservationist

The ‘Heart of the Fraser’ should be deemed ecologically significant according to ORC statement

Fraser Valley Regional District administration/government costs set to rise by 18%

Mosquito control and fire dispatch costs also set for increase

Man killed in crash due to ‘absolutely treacherous’ conditions on Coquihalla

Winter means icy roads are dangerous and drivers should be careful, RCMP say

Annual Stuff the Cruiser event planned for Saturday in Hope

Bring non-perishable foods to help fill up police car

VIDEO: Federal Liberals’ throne speech welcomes opposition’s ideas

Trudeau will need NDP or Bloc support to pass legislation and survive confidence votes

VIDEO: John Lennon’s iconic Rolls Royce rolls into Vancouver Island college for checkup

Royal BC Museum, Camosun College and Carriageworks Restorations come together to care for car

VIDEO: Rockslide closes part of Highway 93 in Fairmont Hot Springs

Geotechnical team called in to do an assessment after rocks fell from hoodoos

Chilliwack mom gives back to neonatal unit with Christmas stocking drive

Ashley Durance is paying it forward to other families and their babies following daughter’s NICU stay

Petition calls for appeal of ex-Burns Lake mayor’s sentence for sex assault

Prosecution service says Luke Strimbold’s case is under review

Northwest B.C. wildlife shelter rescues particularly tiny bear cub

Shelter co-founder says the cub weighs less than a third of what it should at this time of year

BC firefighters to help battle Australian bushfires

Canada sent 22 people, including 7 from B.C.

B.C. NDP touts the end of MSP premiums

Horgan, James held news conference to reiterate that people will get their last bill this month

Illicit drug deaths down, but B.C. coroner says thousands still overdose

Chief coroner Life Lapointe says province’s drug supply remains unpredictable

Most Read