The Consumption Tax Rebate and Transition Act eliminating the Provincial Sales Tax (PST) has been passed in the legislature, preparing British Columbia for a new value-added tax system that economic experts say will create jobs and drive British Columbia's economy forward, said Finance Minister Colin Hansen today.
"By eliminating the PST and shifting to what will be the lowest Harmonized Sales Tax in the country effective July 1, British Columbians will see a net increase of 113,000 jobs by the end of the coming decade and an $11.5-billion increase in capital investment," said Hansen. "As experts have said across the country, reforming our tax system is an essential step to enable B.C. businesses to expand, hire more employees, pay higher wages and lower costs for consumers."
The legislation fulfils the Province's agreement with the federal government to wind down PST by July 1, 2010. The act eliminates the seven-per cent PST and introduces rebates and exemptions that will provide direct benefits to British Columbians.
British Columbians will not pay the provincial portion of HST on: motor fuels, books, children-sized clothing and footwear, children's car seats and booster seats, children's diapers and feminine hygiene products.
The act also provides a provincially administered rebate and credit for the provincial portion of HST payable on energy purchased for residential use. In addition, the act provides for a B.C. HST credit to help low- and modest-income families. 1.1 million British Columbians will benefit from the credit.
"Employers representing more than 1.3 million workers across British Columbia have come out strongly supporting the HST because it will allow them to create jobs and boost wages in industries such as construction, mining, manufacturing, forestry, transportation, agriculture, retail, technology and many others," said Hansen. "It's also important for British Columbians to know that they won't pay a penny more in tax on many of the products and services they use such as basic groceries, health and dental services, child-care services, resale housing and prescription drugs."
The act also eliminates the provincial portion of the hotel room tax, but continues 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.
In preparation for the transition to HST, on May 1, 2010, HST will apply to payments for goods and services delivered on or after July 1, 2010. PST will not apply to those payments. For information, visit the Canada Revenue Agency's website at: http://www.cra
For more information on the Consumption Tax Rebate and Transition Act, visit: www.gov.bc.ca/hst