Consumers have voiced concern over how the harmonized sales tax (HST) will affect their purchasing power, but a group of B.C. businesses is saying the long-term benefits will help all British Columbians.
Representatives from more than 20 business associations, representing 30,000 businesses with one million employees, signed a joint statement pointing to the benefits of HST at a press conference in Vancouver Monday, Aug. 24.
"We believe that HST will improve the underlying strength of B.C.'s economy, improve productivity and most importantly, boost wages," said Max Logan, B.C. director for the Retail Council of Canada.
Logan argued that the efficiencies the HST will create for businesses will translate to more capital for the businesses to reinvest and offer more competitive prices and wages.
He said that has been the experience with businesses in Atlantic Canada where the HST is already used.
Among the groups represented in the pro-HST coalition are retail, petroleum, mining, forestry, chambers of commerce, manufacturing, the film industry, chartered accountants, new car dealers, technologies and construction.
Here on the Coast, Howe Sound Pulp and Paper (HSPP), the Sunshine Coast's largest single employer, stands to benefit from the switch to HST.
Al Strang, manager of environment and external relations for HSPP, said accountants at the kraft and paper producer have crunched the numbers and they are expecting savings between $2 and $5 million annually.
"The biggest part is electricity," Strang said. "B.C. is the only jurisdiction in North America where PST is being charged on electricity used in manufacturing and with a change to HST, we'll get that refunded. So that's over a million dollars a year just in that."
The exact amount in electricity savings, Strang said, will be determined by how much newsprint the mill is producing as the newsprint machines use the most energy.
As for the bottom line, Strang said the HST is a bonus to the troubled company's efforts to trim costs wherever possible.
"As you know, we've been going through difficult times and we've been looking at every opportunity to improve our bottom line," he said. "We had an initiative going for the last couple years where we've taken over $10 million out of our bottom line so an additional $2 million, or whatever it's going to be, is very significant."
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