Former premier Bill Vander Zalm delivers anti-HST petitions in 2010

BC VIEWS: Zombie HST and other tax tales

Could some version of the harmonized sales tax return to B.C.? If Christy Clark is re-elected, it's possible

Some follow-ups today on tax issues, as income tax filing time draws near and Premier Christy Clark shovels out surplus money in the run-up to the May election.

• Is provincial sales tax hidden somewhere in residential BC Hydro bills? Several readers contacted me to ask about this.

I’m advised by the B.C. finance ministry that the answer is no. It is charged on business and industrial hydro bills, one of those historical relics of a sales tax that has been stitched together like Frankenstein’s monster over the decades.

When the harmonized sales tax made its brief appearance in B.C., one of the main orders of business was to devise a tax credit so the provincial portion of HST on home power bills would be repaid.

HST follows the rules of the good old GST, in provinces where the HST applies. And that means it is applied on top of all the other taxes on gasoline, and on electricity bills.

This came up when mayors of struggling resource communities pleaded with Finance Minister Mike de Jong to relieve their pulp mills and sawmills from this burden, the only such sales tax in North America.

• Could the zombie HST ever lurch back to life? It’s possible, especially if Clark’s BC Liberals get re-elected.

De Jong set up a Commission on Tax Competitiveness last year, and its report last November built a strong case for what they called a “Made-in-B.C. VAT.”

VAT stands for value-added tax. In principle it’s roughly the same as extending sales tax on services and providing some breaks for goods that carry the load now.

The Frankenstein PST clutches business by the throat, taxing not just huge hydro bills but things like computer software and telecommunications services.

“The commission recommends all capital expenditure by business be exempted as soon as possible,” its report says. “This would be the single most effective short-term tax reform measure to improve competitiveness.”

This is especially urgent as U.S. President Donald Trump prepares to slash the corporate income tax rate, which is currently far higher than in Canada. Listen for a giant sucking sound as our high-tech jobs go down to Washington and California.

• Is the foreign buyers tax, bolted onto the property transfer tax in Metro Vancouver last summer, really working? Yes, and not just as an extra cash cow for the B.C. government.

Metro Vancouver’s average home price dropped 12 per cent from December to January, accounting for most of the six-per-cent decline for B.C. home prices overall during that time.

• Is B.C.’s carbon tax really revenue neutral? The Fraser Institute’s Charles Lammam and Taylor Jackson dug into that, and their answer is no, not any more.

Provincial income tax reductions, five per cent off the lower two brackets, and rural and low-income credits, initially did return all of the carbon tax revenue.

In the past few years, the Fraser Institute economists point out, these measures have fallen behind the growing carbon tax revenue.

The government has maintained the appearance of revenue neutrality by counting other tax credits, some of which were put in place before the carbon tax arrived in 2008.

They counted the small business venture capital tax credit, the training tax credit, the children’s fitness credit and children’s art credit. I guess if your kids play hoops or paint pictures, they’re not riding in your planet-cooking vehicle.

Even B.C.’s extravagant film production tax credit is counted against the carbon tax. So when Hollywood moviemakers fly up from La La Land to shoot scenes, that’s “climate action?”

Tom Fletcher is B.C. legislature reporter and columnist for Black Press. Email: tfletcher@blackpress.ca Twitter: @tomfletcherbc

 

Just Posted

Ross is counting on Wilkinson to stick to his promise to fight for the north

Skeena BC Liberal MLA Ellis Ross is counting on newly-elected BC Liberal… Continue reading

BC BUDGET: New spaces a step to universal child care

Fees reduced for licensed daycare operators

BC BUDGET: NDP cracks down on speculators, hidden ownership

Foreign buyers’ tax extended to Fraser Valley, Okanagan, Vancouver Island

BC BUDGET: Payroll tax replaces medical premiums

Health spending to increase $1.5 billion for drugs, primary care teams

Northwest Community College board appointments made

New board members have NDP flavour

VIDEO: Top 10 B.C. budget highlights

The NDP is focusing on childcare, affordable housing and speeding up the elimination of MSP premiums

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

Video: B.C. firefighters featured in quirky video

Oliver Fire Department posts video about their B.C. volunteer firefighter spring training seminar

OLYMPIC ROUNDUP: Two more medals push Canada into second place

A gold in ski cross and a bronze in bobsleigh as men’s hockey advances to the semis

Trudeau reiterates denial of Sikh separatists in cabinet, condemns extremism

“We will always stand against violent extremism, but we understand that diversity of views is one of the great strengths of Canada.”

Canada wins gold in men’s ski cross

Leman earns redemption with ski cross gold; Homan out early

Trump says more must be done to protect children

In a tweet Tuesday night, Trump indicated he wants to strengthen the background check system, but offered no specifics.

Evangelist Billy Graham has died at 99

Graham died Wednesday morning at his home in Montreat, North Carolina.

Canadians capture bronze in women’s bobsled event

Canadians Humphries, George take bronze in women’s bobsled event at Olympics

Most Read