B.C. Chamber speaks to locals on HST
By Kyra Hoggan
Photo: Castlegar Chamber of Commerce executive director Pam McLeod.
More than a dozen local business interests were on hand Oct. 6 at the CBT Forum (across from city hall) to hear from Jon Garson, vice president of public policy development for the B.C. Chamber of Commerce, regarding the new Harmonized Sales Tax (HST).
Representatives were on hand from the Castlegar, Nakusp and Rossland chambers, and the Columbia Basin Business Exchange, as well as several Castlegar business owners.
First up to the podium was Castlegar Chamber of Commerce executive director Pam McLeod, who told the assembled crowd the response she’s gotten so far has been mixed, even after meeting with local MLA Katrine Conroy and organizing several focus-group meetings designed to clarify the impact HST will have on Castlegar business.
“The board is less-than-impressed with the way the government has released information regarding the HST, because too many potential impacts have not yet been clarified,” McLeod said.
“We don’t intend to take a position on this until we know how it’s going to effect all the sectors of our membership.”
Garson said, however, the B.C. Chamber is very much in support of the HST, which he said most definitely will become a reality on July 1, 2010, irrespective of current calls to kibosh the new tax.
“The HST will go through,” he said.
In fact, he said, the B.C. Chamber asked for such a tax after its annual general meeting in 2002, calling on the provincial government to, “commit itself to moving quickly to reaching an agreement with the federal government (for a harmonized tax).”
He said upsides include the end of PST (provincial sales tax), with B.C. joining 90 per cent of the Canadian community as well as 130 other nations in its taxation system. He said the HST will simplify processes, with the federal government as sole collector of a single 12-per-cent sales tax, reducing paper work and red tape for B.C. businesses.
“There are concerns, and we’re not immune to those concerns,” he added, saying the most heavily-impacted sectors will include restaurants, tourism, housing and the service sector. “This raises two critical questions: how much will consumers have to pay, and; can they absorb this extra cost?”
He said the B.C. Chamber is looking for ways to mitigate the impact, but tax exemptions seem an unlikely alternative, as what little wiggle room existed was used up for the fuel exemption, and for necessity purchases like diapers, children’s clothing, feminine hygiene products and residential energy consumption.
“At this point and time, we actually don’t have any solutions – we’re working in concert with sector associations (but) at this point, we don’t have any consensus on mitigations,” he said, adding the lack of consensus is driven only by a lack of understanding as to what the final impacts will look like.
He said the vociferous support of the HST by the B.C. Chamber has generated “significant political capital”, which they will use to advocate for productive mitigation measures as they arise.
“Our position is slightly more nuanced than (poster boy for the HST),” he said.
“HST will have a profound positive impact on the B.C. economy, but we want to have mitigations to bring to the government in time for Budget 2010.”
He called for input from the various sectors, via their sector associations, in coming up with productive, realistic mitigators they can take to the province.
He called the HST a “cleaner, more visible tax”, offering provincial government numbers that indicate the new tax will eliminate $150 million on administrative costs while removing $2 billion of taxation currently hidden in the supply chain.
He also said the timing is critical, as it will see B.C. adopting the tax at the same time as Ontario, rather than losing a competitive edge by waiting until after Ontario has instituted the HST.
He said options include questioning the B.C. government’s use of a $1.6 billion transitional grant from the federal government, which was slated into the province’s general revenue (but could perhaps be used for mitigation efforts), or possibly even abolishing all exemptions to create a flat five-per-cent tax across the board – but that latter option won’t likely be tabled until the 2012 budget, if at all.
He also implored local businesses to accept the reality of the HST and start planning accordingly.
“Practically, businesses have to start getting ready – you should be talking to your accountant now,” he said, adding you should look at what’s PST exempt now when decided where and, more importantly, when, to invest back into your business.
For more information on the HST, visit www.gov.bc.ca or www.bc.chamber.org
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