B.C.'s Finance Minister, Colin Hansen, introduced legislation last week that paves the way for the new 12 per cent harmonized sales tax (HST), expected to take effect July 1.
"Our current provincial sales tax is a substantial and complex statute that costs B.C. businesses millions of dollars a year in administration and compliance," said Hansen in a statement. "By reforming our tax system and introducing the HST, businesses will be more competitive and our province will see an increase in investment, productivity and economic growth."
Hansen tabled the Consumption Tax Rebate and Transition Act on March 30. It eliminates the seven per cent provincial sales tax (PST) and the hotel room tax and introduces measures designed to mitigate impacts of the HST on British Columbians.
For consumers, the new tax will mean an increase in the cost of an array of goods and services, including haircuts, real estate fees, bicycles, funerals, restaurant meals and health club memberships. All of these increases are due to the fact that many items excluded from PST will be subject to HST.
While the act eliminates the provincial portion of the hotel room tax, the two per cent additional hotel room tax levied on behalf of local governments, regional districts and destination marketing organizations to raise revenue for local tourism marketing continues.
The opposition New Democratic Party (NDP) said it will fight the HST every step of the way.
"Today's HST legislation is the ultimate betrayal of the public trust," said NDP leader Carole James in a statement. "The B.C. Liberals promised voters and businesses they wouldn't introduce the HST. But that's exactly what they did. They broke their promise to the people of this province."
NDP MLA Nicholas Simons, who represents the Powell River-Sunshine Coast riding, said the HST is a tax shift from corporations to individuals.
"Individuals to small business owners, in fact the vast majority of British Columbians, feel betrayed by this tax," he said. "From the first sip of coffee in the morning to the cost of a funeral, all are subject to the HST. It's unfair to the people of the province, especially since they promised they wouldn't do this."
A government-commissioned report by economist Jack Mintz found that the HST plus federal and provincial corporate tax cuts will result in 144,000 more jobs plus $14.4 billion in capital investment in the province by the end of the decade. The report calls tax harmonization a "game changer" for the province, predicts that the HST alone will create 113,000 jobs and cause a $11.5-billion in capital investment.
"In summary, the tax reforms about to be implemented in British Columbia will have a profound effect on capital investment, jobs and incomes in the province, representing a giant leap toward its becoming one of the most competitive economies in the world," the report concluded.
Simons said one last-minute study suggesting the HST "might be good, should not be, and isn't, sufficient to convince British Columbians to be pleased."
Bill Vander Zalm, former BC premier, launched a campaign to end the HST on Tuesday, April 6. Registered canvassers have 90 days to collect signatures of at least 10 per cent of registered voters in each of the province's 85 electoral districts.
In order to sign the petition, individuals must be registered on the provincial voters list as of April 6, 2010 and may only sign a petition sheet for the electoral district in which they are registered to vote at the time of signing.
-With files from Coast Reporter
