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For The Record

THE FACTS ON HARMONIZED SALES TAX

Sept. 19, 2009
Ministry of Finance
 
Letters to the Editor
Opinion Editorials

Leading economists have said implementing the HST is the single biggest thing we can do to stimulate our economy, create jobs and attract investment.  Here are the facts on the HST:

The HST will keep B.C. competitive – helping to create jobs and attract investment.

  • The HST eliminates embedded taxes along the “value chain” and replaces it with a single tax.
  • At 12 per cent, B.C. will have the lowest rate of HST in Canada.
  • Six of the 10 provinces have, or are moving to, a value-added tax (VAT) – with B.C. as the seventh, that would cover over 90 per cent of Canada’s population.
  • Over 130 countries, including 29 of 30 OECD countries, have moved to VATs.
  • The HST will reduce B.C.’s Marginal Effective Tax Rate by 40 per cent (below ON and AB).
  • The overall tax burden in B.C. will remain the 2nd lowest in Canada.
  • Business organizations representing more than one million workers in British Columbia have come out in support of the HST.

The HST will support job-creating industries in every region of the province.

  • $1.9 billion in taxes will be removed from business inputs, including:
    • $880 million from construction;
    • $140 million from manufacturing;
    • $210 million from transportation;
    • $140 million from forestry;
    •  $80 million from mining and oil and gas.
  • $150 million in savings through reduced compliance costs.

The HST will bring in federal dollars reducing the prospect of future debt or tax increases.

  • $1.6 billion in federal transition payments for adopting an HST to support critical services such as health care and education.
  • $30 million in government administrative savings that will be directed towards services.

Reducing input costs will save consumers money.

  • Studies in Atlantic Canada show that before-tax prices went down, while per capita investment went up over 11 per cent after the HST was introduced.
  • International studies show countries with value added taxes, like the HST, have lower prices.

New Tax credits and exemptions will support low income British Columbians.

  • Low income individuals and families will receive the BC HST credit of $230 per family member. About 1.1 million British Columbians will benefit from the HST credit.
  • Consumers will not pay the provincial portion of the HST on residential energy including oil, electricity, natural gas, and propane used to heat or power homes.
  • Consumers will also not pay HST on many essential items such as residential rent and basic groceries.

Budget 2009 outlines new tax reductions to support families and small businesses.

  • The September Budget Updateraises the small business income tax threshold to $500,000 from $400,000, effective January 1, 2010. This measure alone will save small business in B.C. $20 million annually.
  • For individual taxpayers, the basic personal income tax credit is being increased to
    $11,000 from $9,373, an increase of 17 per cent, effective January 1, 2010.
  • As a result of this and other tax measures introduced by the government, as of January 1, 2010, individual British Columbians earning up to $118,000 annually will pay the lowest provincial personal income taxes in Canada.
  • The HST will build on over 120 tax cuts since 2001 and help B.C. maintain its position as one of the lowest tax jurisdictions in North America.

For more information
Harmonized Sales Tax

Letters to the Editor

October 19, 2009
Letter to the Editor
EDITORIAL A NAME-CALLING EXERCISE
By Colin Hansen
Minister of Finance
Submitted to: Prince George Citizen
Status: Not published
Your Oct. 19th editorial (Snake oil salesmen) does a disservice to public debate, resorting to name calling and making absurd statements purporting as facts. Let me be clear – the decision to move to a HST was first considered at the end of May, after the election. [Read More]

August 7, 2009
Letter to the Editor
HST rebates and credits
By Colin Hansen
Minister of Finance and Deputy Premier
Submitted: Vancouver Sun
Status: Published August 4, 2009
In his Aug. 4 opinion piece on the new Harmonized Sales Tax (HST) New Democratic Party finance critic Bruce Ralston ignores a number of key facts. [Read More]

July 28, 2009
Letter to the Editor
HST – A Competitive Advantage for B.C.
By Colin Hansen
Minister of Finance
Submitted: The Vancouver Sun
Status: Published July 30, 2009
Rory Fader (Letters, July 28) is not correct when he writes, "Only the final retail sale of the finished product is subject to the payment of PST." [Read More]

Opinion Editorials

September 1, 2009
Opinion Editorial
PROTECTING VITAL SERVICES MEANS MAKING TOUGH CHOICES
By Colin Hansen
Minister of Finance
Submitted: Vancouver Sun
Status: Published on Wednesday, September 2, 2009 (page A15)
"British Columbia faces significant economic challenges. The provincial Budget Update tabled in the legislature yesterday reflects these difficult times." [Read More]

July 24, 2009
Opinion Editorial
SALES TAX REFORM DRIVING B.C.’S COMPETITIVE ADVANTAGE
By Colin Hansen
Minister of Finance
Submitted:Vancouver Sun
Status: Not Published
During tough economic times British Columbia must move boldly and dramatically to attract investment and keep British Columbians working. [Read More]