HST debate heats up as vote nears

Does this trucker get equipment input credits from the HST? Yes. Does he work for a 'big business'? No.

VICTORIA – My feedback on the harmonized sales tax debate is running hotter as taxpayers await Premier Christy Clark’s “bold” changes to the tax, due to be revealed any day.

In response to several angry readers, I will restate what I had hoped was obvious by now. All but the poorest consumers (myself included) are paying more tax under the HST than they were under the old provincial sales tax. The richest pay by far the most.

The “embedded” PST has been removed from many products, but evidence isn’t yet clear that this is being passed on to consumers, as economists predict. What is clear is that businesses are benefiting. What is still in dispute is what businesses are helped most.

Doug Donaldson, the NDP MLA for Stikine, objected to my statement last week that he was wrong about the HST beneficiaries being “Liberal donor corporations.” So again I will state the obvious, that forest, mining and other resource companies donate to the B.C. Liberals. (The NDP is on record as wanting to increase corporate income and capital taxes.)

Donaldson goes wrong when he specifies “corporations” rather than small business. Consider the forest industry.

Over the past 20 years the entire B.C. industry contracted out its harvesting operations, based on the well-tested principle that independent contractors are more efficient than inflexible, strike-prone major forest operators. That has been a painful process, not just economically but in terms of worker safety. But it’s exactly the kind of global-market shift that is being imposed on B.C.

As mentioned last week, you may not like that, but you shouldn’t believe those who try to pretend it’s not happening. And those big “corporations” had their major machinery and equipment exempted from sales tax long before the HST. It’s the small contractors who are now getting the benefit.

NDP finance critic Bruce Ralston notes that anyone can incorporate for tax purposes. It’s common for doctors, dentists and lawyers such as Ralston. But is it practical to expect the owner-operator of a logging truck to do that?

The independent truck drivers I’ve met are more concerned about paying their next fuel bill than hiring a lawyer to incorporate them. Increasingly it is immigrants who drive trucks, out-working the resident population to get ahead as immigrants have always had to do.

Speaking of immigrants, the situation in Vancouver real estate is worth noting. One of the things HST was supposed to severely depress was high-end new housing, now subject to the seven-per-cent provincial portion of HST once the prices exceeds $525,000.

What has happened? Offshore buyers are pushing costs out of the reach of B.C. residents who aspire to an ocean view. In many cases these are “satellite families,” taking advantage of our clean, stable, safe jurisdiction on the Pacific Rim. Mum may drive the kids to private school in a Range Rover, but the family reports little or no Canadian income. The only way these residents will pay a share is through consumption taxes.

I have also argued that migration of retirees will dominate B.C.’s population growth in the coming years. This is another group that reports less income but has significant consumption.

A recent BC Stats study shows that I overstated the impact of retirees. Since 1961, only seven per cent of migrants to B.C. have been 65 or older.

Younger people are coming here to work, and increasingly they will be self-employed or in small business.

The NDP supports lowering small business income tax to zero. They should also support the HST.

Tom Fletcher is legislative reporter and columnist for Black Press and BCLocalnews.com

twitter.com/tomfletcherbc

Just Posted

New Lake Country middle school named after inspirational teacher

Central Okanagan school board settles on H.S. Grenda Middle School

B.C. Tree Fruits searching for new CEO and CFO

Top job postings at growers’ cooperative listed quietly at the end of November

Deadline looming for participation in Okanagan Travel Survey

Those who were sent survey questionnaires have until Dec. 18 to complete and return them

Submissions sought for UBC Okanagan’s annual fiction competition

University’s annual short-story contest enters its 21st year

Kelowna School students fundraise for community foodbank

Students at Willowstone Academy look to fill christmas hampers

Man caught on camera allegedly trying to defraud ICBC

Auto-insurer warns B.C. drivers to record info after crashes

Warning issued as forecast calls for 20-foot waves in Tofino

Dangerous waves, strong currents and upper-shoreline flooding expected for Tofino-Ucluelet area

An 800-pound pig named Theodore needs a forever home, B.C. society says

‘Theodore is not destined to be somebody’s bacon’

2,000 Canadians died of an overdose in first 6 months of the year

New data from the Public Health Agency of Canada shows the crisis is not subsiding

Single-bridge option chosen to replace Highway 1 bridge in Sicamous

Five-lane span selected over plan with second bridge at Sicamous’ Main Street

UPDATE: Highway 1 closed east of Revelstoke, expected to open at 7:30 p.m.

Highway 1 is closed east of Revelstoke near the west entrance to… Continue reading

Teenager Alphonso Davies wins Canadian Men’s Soccer Player for the Year Award

Derek Cornelius and Chilliwack native, Jordyn Huitema were named Canadian Youth International Players of the Year

B.C. teen MMA fighter shows heart

Young Unity MMA competitors bring home Ws

Another B.C. city votes to ban single-use plastic bags

First six months of proposed ban would focus on education, not enforcement

Most Read