On Friday April 28, 2017 during a campaign stop Christy Clark was asked if the Liberal Government would bring in an HST or another form of value added tax. She emphatically denied that they had any plans of returning to the HST.
Then she made the following comments: "But the thing is though, we do know that the tax competitiveness panel came back with a recommendation for a value added tax, which is different.
"And so what I've said is look, we'll be prepared to talk to the business community and British Columbians about different ways we can reach tax competitiveness, but it isn't going to be an HST, we've been down that road, it ended badly, people didn't like it. And when people talk so clearly to their governments, government should listen to them."
So what's one to think about that statement? Well firstly lets look at the definition of the Harmonized Sales Tax and a Value Added Tax.
Harmonized Sales Tax, commonly referred to as HST, was a value added tax that combined a five per cent federal portion and a seven per cent provincial portion into one tax paid on almost all purchases of goods and services by the consumer.
Value Added Tax, also called a VAT, is a tax levied at each addition of value in the processing of a raw material, the performance of service or the production and distribution of a commodity with each payer, except the consumer, reimbursed from payment at the next stage.
So in effect there is no difference between the HST, and the VAT.
Both taxes are paid for by the ultimate consumer.
So the question is why would the premier try to suggest that these taxes are different?
One reason could be the bad experience that the Liberals had when they combined the PST and GST into the HST in July of 2010.
This HST was rejected in a referendum and the government reverted to the former PST and GST model on April 1, 2013.
Another reason is that the government wants to make B.C. business taxes more competitive and one way to do this is to eliminate the PST and bring in a value added tax.
Calling it the HST would not be politically wise during this election.
On the other hand the government would want to ensure that they make some reference to changing to a value added tax during this election so that they do not get called out for not mentioning it during the election like Gordon Campbell's Liberal government did, which led to the referendum that defeated the HST.
So on a Friday, going into a weekend, with just 11 days to go to election day, the possibility of the Liberals bringing in a value added tax has been made public.
Nothing too specific, nothing too definite, but the possibility that there could be a value added tax to help make the business tax in B.C. more competitive.
Its important for B.C. residents to know that the loss of taxes to the government by eliminating the PST for business, will have to be made up by collecting this revenue by implementing a value added tax.
What this means is that some 56 items that are now exempt from the PST will now be taxable under the VAT.
A few examples are restaurant meals, camping sites, movie tickets, admission to professional sporting events, golf memberships and driving range fee's, ski lift passes, funeral services, accounting services, etc.
The list goes on and on.
A new value added tax would cost the typical family over $1,000 a year. (Based on a married couple with one or more children.) So what's the point?
The point is that if the Liberals win the election as the situation now stands, they would have a mandate to bring in a value added tax as recommended by their tax competitiveness panel.
In addition we could be facing a tax increase that would eliminate any and all so-called savings that would have been gained through the reduction of MSP premiums, bridge tolls, etc. so, in effect, an overall tax increase.
We need the Liberal government to emphatically state that they will not implement a value added tax if they are elected, and we need this assurance before we go to the polls on May 9.
Without it we can only assume that the VAT is on the table and vote accordingly.
-- Eric Allen
