Chamber weighs in on GST/PST

Last month’s announcement that the HST will be removed from the province’s tax regime was met with mixed reviews. The 55 per cent of British Columbians who voted in favour of scrapping the tax rejoiced when Elections BC announced that their campaign had been successful. Here in the Okanagan the announcement was accompanied by a different response from voters.

Last month’s announcement that the HST will be removed from the province’s tax regime was met with mixed reviews. The 55 per cent of British Columbians who voted in favour of scrapping the tax rejoiced when Elections BC announced that their campaign had been successful.

Here in the Okanagan the announcement was accompanied by a different response from voters.

“All three of the Central Okanagan ridings voted to keep the HST,” says Lake Country Chamber of Commerce President Marvin Farkas. “We recognize that the tax was negative for some business such as restaurants but overall we believe the HST was better for the Okanagan.”

Farkas says reverting to the GST and PST will seriously impact small retailers such as those found here in Lake Country. He explains that business owners have already paid costs associated to convert their accounting systems to be compatible with the HST and now they will incur additional costs to switch them back. He says bigger companies will may not be significantly affected but he expects the smaller ones to notice the financial bite.

Furthermore the 18 month transition period that is to precede the switch back to GST and PST will create uncertainty in some industries says Farkas. He says people may choose to put off bigger purchases such as housing in hopes that they may be able to take advantage of potential tax exemptions when the preexisting taxation system is reestablished.

Proponents of the HST argued that the tax would enable the creation of thousands of new jobs across the province in the coming years. Farkas notes that although Lake Country doesn’t have many large industries with the capacity to hire a significant number of new staff he points out that Kelowna does have an industrial park in the Jim Bailey Road area and that the creation of new jobs at those businesses would have had the potential to spur residential growth in Lake Country.

A common argument against the HST was that it was seen as an attempt to shift the tax burden of business onto consumers. Farkas disagrees with that assessment.

“Consumers were paying the tax costs of businesses all along. Those costs were just built into the price. The HST has less backend cost which means lower retail costs in the marketplace,” says Farkas.

Farkas says that it was the manner in which the HST was introduced that led to its quick downfall. He says that by failing to mention the tax in his party’s platform leading up to the last election, former Premier Gordon Campbell lost the faith of voters.

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