B.C. reveals plan to merge sales tax with GST
July 24, 2009
24 July 2009
B.C. reveals plan to merge sales tax with GST
The following article is excerpted from the 24 July 2009 edition of “globeandmail.com”.
Looking to close a looming tax gap with Ontario, British Columbia is merging its provincial sales tax with the federal GST - a move that will slash the cost of doing business in the province but drive up the cost to consumers of everything from getting a haircut to buying pricey new homes.
B.C. Premier Gordon Campbell and Finance Minister Colin Hansen said yesterday that they will follow Ontario in creating a single sales tax in their province on July 1, 2010. The harmonized sales tax in B.C. will be 12 per cent, the lowest for those provinces that have agreed to combine their provincial sales taxes with the GST.
Mr. Campbell said B.C.'s shift to a harmonized tax will create pressure on the remaining provinces with separate levies - Saskatchewan, Manitoba and Prince Edward Island - to follow suit….
A senior government source in Ontario agreed, saying it will become increasingly difficult for the three remaining provinces not to follow with their own harmonization plans….
B.C. is portraying the shift as a major cost savings for business, which will be able to claim HST rebates in virtually all cases, Mr. Campbell said. The province had rejected the idea of an HST several times, but Ontario's decision to adopt a blended sales tax altered that calculation in at least two ways. The federal government loosened the rules governing a harmonized tax, but more critically for B.C., Ontario's move opened up a competitive gap that would have threatened to drain corporate investment eastward….