NEWS RELEASE · 30th June 2010
Ministry of Finance
An opinion editorial released today by Bill Vander Zalm contained misleading statements and factual errors. Here are the facts regarding his 10 point list.
1. "It is a cruel tax that will hurt low-income, fixed-income, students, working families and seniors the most".
WRONG: Under the HST there will be a generous B.C. HST tax credit of up to $230 per person for British Columbians with low and modest incomes. Studies including those done by SFU Economist Jon Kesselman, the Fraser Institute and the Canadian Centre for Policy Alternatives have shown low income British Columbians come out ahead under the HST.
2. "It will kill jobs and damage economic activity".
WRONG: Leading economists strongly support the implementation of the HST as they believe it will promote investment, jobs and higher wages. Noted economist Jack Mintz has said that this move alone will create over 113,000 jobs and over $11.5 billion in new investment.
3. "It eliminates fees paid to business to collect the PST. HST must be collected for free".
MISLEADING: The fee was to compensate them for the cost associated with collecting, remitting and filling out PST forms. There will no longer be PST, which saves businesses time and an estimated $150 million per year in administrative costs, not to mention the further $1.9 billion in tax savings.
4. "It will drive up inflation as people demand higher wages".
MISLEADING: The Bank of Canada, TD Economics and economists have all said that harmonization will likely lead to a small one-time increase in the Consumer Price Index.
5. "It will push the economy underground".
MISLEADING: He is alleging businesses will break the law and in the process reject the input tax credits they would otherwise be able to claim.
6. "It will make B.C. less competitive".
WRONG: Most B.C. businesses will actually become more competitive with Alberta because they will now be able to receive a tax credit on all the HST paid on business inputs, as Alberta companies already do under the GST. Asian nations like China, Japan and South Korea already have an HST-style Value-Added Tax - and both are higher than B.C.'s. The fact is, moving to the HST will mean a 40-per cent reduction in the effective tax rate on new investment - creating jobs and bringing more business to B.C.
7. "It will cost more to administer".
WRONG: The HST will save the provincial government $30 million in administrative costs and save business $150 million. It's simpler, and ultimately less expensive, to administer one tax rather than two.
8. "The federal government will take $250 million per year from B.C. in additional income taxes for costs previously considered a "write off" under PST, which will now become taxable under HST. So much for the benevolence of their $1.6-billion transition "gift"-not a bad rate of interest."
MISLEADING: Business will only pay more income tax if they are making more money. The assumption being made is that businesses will not reinvest their PST savings, nor will they pass them onto consumers. The economic studies that have been done simply do not support that assumption. Evidence from the Atlantic provinces has shown that the hidden tax is removed very quickly, with the majority of the savings passed through to consumers in the first year.
9. "The HST is more complex. The HST agreement has 16 pages of calculus formulas outlining the revenue sharing with B.C. that will require math geniuses or computers (or both) to figure out. And the federal government will do the calculating."
WRONG: The formulas are only relevant to the federal and provincial governments to determine provincial shares of HST, and this is far simpler and cheaper for business than having them track the tax paid. In fact, the HST will simplify the work businesses need to do and will save them $150 million annually.
10. "It will destroy B.C.'s sovereignty over provincial taxation. Ottawa will now set the rates, determine our exemptions and will calculate and distribute the revenues to B.C. The HST is as much a power grab by Ottawa as it is a money grab by the Liberals. B.C. does not need to give away control of our taxes in order to reform them. That is a false choice, and one the B.C. government wants to avoid talking about at all costs."
WRONG: British Columbia has far more flexibility under the HST than was previously available. We can set our own tax rate, at 12 per cent the lowest in the country, select our own point-of sale rebates such as the rebate for motor fuel, design our own BC HST credit for those with low and modest incomes, design our new housing rebate and establish the rebates percentages for schools, universities, colleges, municipalities, eligible not-for profits and registered charities to ensure that, on average, they pay no more provincial tax under HST than they paid in PST.
Good deal or what
Comment by Martin Holzbauer on 3rd July 2010
Well ,about 1 million people in BC will get a credit or rebate, that tells me that about amount of people are at ot near the poverty line.
What a great province!
Comment by Karen Dedosenco on 1st July 2010
I was under the impression that the Liberals were not legally allowed to protest the Fight HST initiative until after July 5th. They do not have intervener status and I feel pretty confident that this constitutes interference as do numerous other statements released on this site by either Campbell or the Ministry of Finance.
My 10 Facts
Comment by Shawn Ksisiiaks on 1st July 2010
1. The only reason the province of BC is in this mess is because of your BS pre election budget
2. It is cost me more
3. Prices on goods will not go down as a feel good gesture by businesses to the consumer
4. No cares what the federal banks or economist on your payroll have to say. They are as crooked as you are.
5. Fuel just went up 2.5 cent
6. You won’t listen to the public
7. No matter what you say, I, and many other like me will never trust in you
8. When people have lost faith in their government – no good can become of it.
9. You have ruined my Canada Day
10. You can go #$% yourself
Comment by Helmut Giesbrecht on 1st July 2010
We get it Messers. Campbell and Hanson, The poor get some help and big business gets a lot of help. If you are in the middle and a consumer you will pay more. Statscan doesn't lie and we can't say the same about you. Now even the CTF, hardly a left wing organization, says that the consumer may, that's may get a reduction from the businesses that pay less but don't bet on it. There will not be an accounting and if they simply keep it without passing it on, who is to know.
Bill Vander Zalm may have his faults but he does not have a conflict of interest here. He does not have to protect his reputation about fiscal acumen as you folks do. He is not going to pocket a lot of savings as your business friends do. You think maybe he is less biased.
Comment by Eric Roy on 1st July 2010
What I see is that yesterday I paid $1.75 for my Timmies...today it's $1.87. And they're trying to tell us this will somehow put more money back in our pockets long term??? I don't get it, sorry...