The provincial government's new Harmonized Sales Tax (HST), which will take effect next July, is meeting with mixed reactions on the Sunshine Coast.
Dean Walford, executive director of the Gibsons and District Chamber of Commerce, said the Chamber is split on the subject.
"I'm getting mixed messages from my membership," he said. "It's a double-edged sword."
The new tax will merge the current Goods and Services Tax (GST) and Provincial Sales Tax (PST) into a single 12 per cent tax. The provincial government has touted the move as an "essential step" for the province, saying that it will bring in new investment and reduce administrative costs for businesses.
But Walford said locally, the business community's reaction is split between businesses that sell goods and those that sell services.
"It only stands to reason that a shopkeeper who's already remitting both taxes says, 'Hey, one less layer of paperwork works for me,'" he said.
But for people selling services that had previously been PST-exempt, he said, the news is grim, as their clients get slapped with an additional seven per cent charge on the base fee.
"I talked to some of the web designers and they're aghast at it," he said. "They've got to up their fees and there's really no upside for the client."
Robert Flux, treasurer of the Sechelt Downtown Business Association and a partner with The Coast Group Chartered Account-ants, said the impact on the local business community will vary between goods providers and service providers, with service providers suffering.
On the plus side, however, Flux said, HST should be good news for new businesses.
"The PST that [new businesses] would have had to pay on all their asset acquisitions is now a flow-through to businesses - it's a cost that they don't have to pay anymore," Flux added.
Nicholas Simons, MLA for Powell River-Sunshine Coast, said that while everyone will feel the impact of the new tax, people with fixed and lower to moderate incomes will be the hardest hit.
"It'll reduce the amount of money they have for discretionary spending, it will cut down on the number of visits to our restaurants, to our shows, to our cultural infrastructure," Simons said. "I just wish that there had been a process that would have at least shown an effort to mitigate those impacts."
Yet despite a sense of local foreboding, the tax has some defenders.
Maureen Bader, the B.C. director of the Canadian Taxpayers Federation, said that for once she finds herself defending a government taxation policy.
"It's always better when I'm there banging my shoe on the table and saying 'This is outrageous,' but every once in awhile we need to take a step back and make the geeky economic argument, showing that this is in fact a positive tax reform," Bader said.
One key advantage, she said, stems from the visibility of the tax - and the likelihood that it will mobilize citizens to demand more accountability for government spending.
"What this does is sort of throw in your face, every time you buy something, that you're paying for all this government spending," she said. "Eventually what people will come to demand is better services and less waste from government."
Beyond that, Bader said, studies of the transition to a harmonized tax in the Maritimes showed that it did in fact - after a transition period - lower prices of goods.
Walford, who lived in Nova Scotia at the time of harmonization, said he isn't convinced that consumers gained in the end.
"After awhile there is, you can call it an adjustment period, but it's just an acceptance that this is the way it's gonna be and we've gotta deal with it," he said. "I did not see anybody gleefully dancing around and saying 'This is a wonderful system.'"
