The harmonized sales tax may be hurting some businesses, but the owner of 1550’s Restaurant isn’t feeling it.
Keith Campbell said 1550’s used to be able to write off the five per cent GST on liquor purchases. Under the HST the business can now write off the full 12 per cent.
This has probably saved the Saanich restaurant a few thousand dollars per month, Campbell said, adding overall business has been up 24 per cent this year.
“It’s not hurting us at all,” he said, of the change in tax regimes.
The HST, introduced by the B.C. Liberal government last summer, combined the GST and provincial sales tax into a 12 per cent tax that is added to most goods and services.
The unexpected introduction of the tax soon after the provincial election led to public outcry and a petition calling for a return to the PST. The fact the next tax also applies to goods and services that had been exempt – such as esthetics, over-the-counter medications, funeral services and sports equipment – also fueled opposition.
The government responded by announcing a province-wide referendum that will be mailed out this month and due back by July 22.
Last month, in an attempt to make the value-added tax more appealing, B.C. Finance Minister Kevin Falcon announced a plan to reduce the HST to 10 per cent by July 2014 and give out one-time rebate cheques of $175 to families and low- and middle-income seniors.
At Mac’s Cycle on Shelbourne Street, owner Cam Wallis is at a loss to understand why cyclists are effectively being penalized under the HST.
“The government puts tax on carbon. Why would you put tax on fuel-efficient transportation?”
The 12-per-cent HST on bikes eats up money people would be spending on safety equipment like lights and helmets, which used to be PST-exempt, Wallis said.
“Customers complain all the time,” he said.
Victoria resident Gail Morrison said the HST costs her almost $100 extra per month to take her trailer up to Coombs with her family for the summer. The cost of a camping spot has gone up from $700 to $794 a month.
“My biggest beef is it costs an extra $100 to go camping,” she said.
In her opinion, the government’s proposed rebate cheques are “hilarious” and she wonders whether she’ll get a cheque for being a senior and having a family.
“I’m just wondering if I get $350 instead of $175 because of both,” she said.
At Royal Oak Burial Park, executive director Stephen Olson said his business has been able to avoid price increases on goods like urns because suppliers are passing on savings they get from not paying the PST. That’s something the government said would happen once the new system increased efficiencies for industries that supply retailers.
However, Olson has noticed a decrease in families purchasing future arrangements, as taxes now apply to funeral, cremation and cemetery services, which had been exempt. The implementation of the HST also meant the elimination of the car luxury tax, which previously applied to vehicle purchases over $55,000. At Speedway Motors, which sells Audis, Porsches and Volkswagens, this has been great for business.
Vice-president of operations Carl Munro said with an across-the-board 12-per-cent levy, customers are no longer avoiding bigger purchases because of the luxury tax.
“It lifted a bit of weight that was there. People used to sneak in underneath (the $55,000) mark – they can’t do that anymore,” he said.
As well, before the HST, cars bought privately were PST-exempt. Munro said he thinks that was unfair to those buying from dealers.
“We’re not happy that people have to pay more tax, but happy it puts business and private (sales) on the same playing field.”
Now in the hands of voters
Next month, the decision whether or not to scrap the HST will be literally in voters’ hands.
From June 13-24, every eligible voter in the province will receive referendum ballots. The last day to request a ballot is July 8, and they have to be mailed back in before 4:30 p.m. on July 22. Starting June 6, the government will mail out voter guides.
A majority vote is needed for the referendum to pass. But the rotating Canada Post strike may delay the referendum. Elections B.C. CEO Craig James has said he has the authority to push back the return ballot date if needed.
Victoria-Beacon Hill MLA Carole James said that she and members of the New Democratic Party (NDP) will be going door-to-door as soon as the ballots are mailed out to remind voters they’ll need to check the YES box on the ballot if they want to get rid of the tax.
The referendum reads: ‘Are you in favour of extinguishing the HST (Harmonized Sales Tax) and reinstating the PST (Provincial Sales Tax) in conjunction with the GST (Goods and Services Tax)?’
“I think it’s a confusing question,” she said. “I think people want to vote (against the HST), but will … check the NO box.”