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Posted on July 31, 2009 - by J Lane

BC’s HST and writing to politicians

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This is going to be a bit of a long post, you’ve been warned.

The other day, I actually wrote to my MLA (Member of the Legislative Assembly) to express my concern over the Government’s proposed HST.  His response was a great reminder of why I never bother to write to politicians – it was a copy and paste of the Government’s press releases and talking points.  I’m going to post the e-mail I sent, and then look at the Minister’s response.  Here’s my message:

Hon. Minister Coell,

As a voter in your riding, a small business owner, and a father of  two, I must admit that I am extremely concerned and disappointed by  the announcement of the HST in British Columbia.  Despite the  attempted spin by your government that it is a positive thing, and  that it will save businesses money, I believe the exact opposite is true.

I develop web sites for clients in British Columbia and in other parts of Canada.  While I was previously required to charge GST of my clients, I am now unclear as to whether I will now have to charge
clients HST instead.  If the answer is yes, I can foresee a significant loss of business with those clients residing outside of  British Columbia; a sudden increase by 7% in my rates is ridiculous  (unless of course your government would like to see me absorb that  cost by lowering my rates).  Conversely, requiring me to only charge  HST of clients within BC adds additional administrative overhead.  I  can’t really see how it saves me money, regardless.

As a consumer, I’m appalled that previously non-taxable items (non PST  taxable items) will now be included in the HST.  I work part-time in the tourism industry on Mayne Island, and I can tell you that in that
area, we are feeling the pinch of the recession.  Numbers are  definitely off from last year.  I can’t imagine what logic concludes that by raising taxes on things like restaurant meals travel and  tourism will recover.  I have talked with other islanders who are considering vacationing outside the province, because it is less  expensive than being here.

I think that most disappointing is the HST on used home sales.  While  the real estate market is recovering in major centers such as  Vancouver and Victoria, rural locations are still in a slump.  I do  not have access to exact figures, but my feeling is that home sales on  Mayne Island over the last 12 months could easily be counted on two hands.  Inflating prices by 7% is not going to help that.

Minister Coell, I must admit that I am not a major supporter of the  Liberal Party in BC.  I have often criticized your government’s  handling of the ferry system, as well as your failure to assist us  with keeping the Miner’s Bay dock accessible to vehicle traffic (I  dread the day that an ambulance is hung up there and is unable to  deliver their patient for medical evacuation because of a misplaced  key).  I must admit, however, that during the last provincial election  that I thoroughly researched all political parties and candidates  within this riding.  I was extremely tempted to vote for you  personally because I received the impression that you are one of the
diamonds in the rough that is the Liberal Party.

Regardless, I wanted to voice my concerns to you, in hopes that the  Liberal government will re-think this potentially disastrous move.

I think I’ve got some valid points there.  Most importantly for my own situation: will I have to start charging my customers HST instead of the GST I currently charge?  I think the answer is yes, but I honestly just don’t know.

The response I received (with my own reaction in red):

Dear Mr. Lane,

Thank you for your email regarding the proposed harmonized sales tax (HST) .  I appreciate your concern, this is a significant tax change in British Columbia.  However, it is one that our government believes will benefit consumers and businesses alike.

More than 130 countries world-wide, including 29 of 30 of the OECD countries, have implemented value-added taxes. Value added taxes?  I don’t think any type of tax adds value to a purchase. In Canada 4 provinces have adopted the tax and Ontario recently announced that they would be implementing a federally administered HST. If I wanted to live in Ontario, I’d move there.  That aside, I don’t disagree with the PST — I think that sales taxes are better than income taxes given the choice.  The problem is that there is no uniformity in their application across Canada. With BC, six of Canada’s 10 provinces will have a similar sales tax by July 1, 2010.  BC will have the lowest HST in Canada at 12 per cent while all other provinces with an HST have a rate of 13 percent. Except for say, Alberta, that has an HST at 0%.  But we’ll pretend they don’t exist, that’s okay.

Adopting a HST eliminates taxes on productivity replacing them with taxes on consumption. This is great news!  I missed the press release saying that I would no longer have to pay provincial income tax!  Send me the link! This measure will reduce taxes on business investment by as much as 40 per cent or $1.9 billion annually. Sounds good, but how?  A sales tax that is charged to consumers at the point of purchase reduces taxes on business investment? It will dramatically reduce business administration costs by $150 million annually.  Again, how?  Personally, I’ll have to start adding an additional tax on to all of my invoices.  Unless I don’t have to charge HST on clients outside BC… then I’ve got 2 tax rates.  I can clearly see how that will decrease my administration costs by having to complete two separate returns! It will save the BC government $30 million in administrative costs annually – money that can be used to provide programs to residents of BC.  I think this is the first line of truth in the entire message.  Well, half truth.  I’m sure that the $30 million saved will not actually lead to any sort of noticeable improvement in programs. It will inject $1.6 billion in federal funds into the BC economy. Is this what’s referred to as a “kick back”?  Ignorant me.

For the average consumer harmonization will have little impact with respect to the purchase of goods and services currently subject to PST however, it will mean paying tax on goods and services currently exempt from PST. Well yes, I am capable of doing the math that 5% plus 7% is 12%.  My concerns were with those exempt items you brush over.  I can see how a $28,000 increase in price on a $400,000 “used” home (average price for Vancouver) would have little impact on consumers. Even with this increase BC would continue to have the second lowest overall tax burden for individuals and families as a result of the personal income tax cuts introduced since 2001. (Ah yes, and it’s done amazing things for our child poverty rate.  No wait.) The HST is being designed to protect low income earners in British Columbia.  Assuming that those low income earners don’t need their hair cut, to purchase affordable housing, or to eat in a restaurant. A refundable BC. Income Tax Credit will be paid with the current GST credit to offset the impact of the tax on those with low income.  That’s good news, but that could easily be done with the current PST.

If you have further question I would like to direct you to the Ministry of Finance website on the subject at www.fin.gov.bc.ca/scp/hst/. Thanks, but I think you’ve pretty much copied and pasted the contents here.  Who should I contact to have my specific questions actually answered?

Thank you once again for taking the time to make me aware of your concerns.

Murray Coell, MLA
Saanich North and the Islands
Toll Free:  (866) 655-5711
Phone (250) 655-5711
www.murraycoellmla.bc.ca

I know that Mr. Coell is a busy guy, and that it was just a staffer that replied to this message.  I’m not delusional.  It would have been nice if they even attempted to answer my questions/explain things better.

Update: I wrote a second post with some links to your options for opposing the HST.  Check it out if you want to get involved!

This entry was posted on Friday, July 31st, 2009 at 3:50 pm and is filed under Featured Posts. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

24 Comments

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  1. Visit My Website

    July 31, 2009

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    Cody said:


    I believe in most circumstances, sales tax is only applied when the seller and buyer live in the same jurisdiction. i.e., you charge HST in BC, GST for the rest of Canada, and no tax to people outside Canada. I agree, I don’t know how that saves business money.

    I wrote my MP last year about the copyright bill they were trying to push through and got a similar PR type response. When I replied I got a second response saying he didn’t know the answers to my questions so was forwarding it on to the minister. Of course, I never heard from the minister. My expectations were pretty low from the start, but they at least saw there were real people opposed to the bill and I think that’s worth something.



  2. Visit My Website

    July 31, 2009

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    J Lane said:


    I’ve got a client who has an office in BC, but the company’s head office is in Calgary. What then?

    Working at a resort here on island, I know we charge everyone GST, if they’re from Canada or not. Apparently there’s some way to get it refunded from the GoC after the fact, but I doubt anyone ever does that.



  3. Visit My Website

    August 1, 2009

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    elk71 said:


    I suppose with this added income from the new HST we will see improvements in the salaries that those that are leading are province will recieve, because there will be extra money available from taxing the poor to death and beyond. I know this is off topic but I wonder how those that help us daily and have a great deal of stress in their job (Paramedics) who help save lives for a living. If you can call it that. They have to go on strike to get a raise but good old politicians get all the raises with a stroke of the pen. It is all very well deserved not like they don’t get enough, already while killing us. When was the last time we saw a politician on strike for 4+ months for a raise and better working conditions?? Personnally I can’t recall. I think I should do my 6 years in politics and then get my pension, not like they don’t go work for a friend who they helped during there time in office when they are finished there political life. Politicians are the devil’s from hell.



  4. Visit My Website

    August 1, 2009

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    J Lane said:


    I don’t think it’s off topic at all. How our public officials are (mis)spending public funds is at the root of the problem. They wouldn’t need to raise taxes if they weren’t paying the BC Ferried CEO over 1 million dollars in compensation for extremely poor performance.

    It’s apalling that they haven’t reached an agreement with paramedics yet. Every time I see these exceptional individuals out walking the picket line, my heart goes out to them.



  5. Visit My Website

    August 1, 2009

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    Phil Rosenstein said:


    Its a shame that response doesn’t address your foremost concern. I would be inclined to respond simply to this point (so as not to invest too much more time):

    Thank you for your swift response. You made one statement that I consider to be very important for the welfare of all working Canadians: “Adopting a HST eliminates taxes on productivity replacing them with taxes on consumption”. Can you please clarify which taxes on productivity are being eliminated?



  6. Visit My Website

    August 1, 2009

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    J Lane said:


    No point asking them to lie Phil :-)



  7. Visit My Website

    August 1, 2009

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    Leah said:


    Kudos!

    As one of those low income folks, I’m frightened as to what my hair will look like once I can’t afford Magic Cuts.

    In all honesty, I don’t feel “protected” by this at all.



  8. Visit My Website

    August 1, 2009

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    J Lane said:


    Thanks Leah.

    Yeah, I definitely don’t fall in to the high income category either. Not bad, but certainly not rolling in it. I remember just starting out and trying to buy a first home though…



  9. Visit My Website

    August 2, 2009

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    Tim said:


    Can someone explaint to me why the Feds will give BC 1.6 billion to get in bed with them on this HST thing? What is their deal on this? How will this benefit them?



  10. Visit My Website

    August 2, 2009

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    Trevor said:


    Those Liberal MLA’s are all idiots. They are just rubber stamps to Gordon Campbell. If they want to be elected next term, they need to divoice from Liberal now.



  11. Visit My Website

    August 3, 2009

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    Andy said:


    How disappointed your vote given to this MLA. The MLA just did copy/paste to answer your (I assume many BC residents) concerns!!! How can you or we trust the MLA guy. Definitely he should be out next time. Actually your reaction already answer some questions. The HST proposal is simply to grab the money from consumers. It’s best not to purchase or reduce buying … whenever possible if BC HST is approved. why not stop it? Can the opposition parties play a role in stopping it?



  12. Visit My Website

    August 3, 2009

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    rose said:


    We are taxed to death in this provence.
    We must stop HST.No No No!!!



  13. Visit My Website

    August 3, 2009

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    J Lane said:


    @Tim: It’s described as “transition money”. I guess it would cost something to move from one system of taxation to another. Personally, I think that the $1.6B is one of the major reasons we’re seeing the HST at all.

    @Andy: The real problem is that reducing spending is exactly what will amplify the effects of the recession. Unfortunately, it’s just bound to happen — with people having to spend more on necessities (like their utilities bill), they’ll have far less discretionary spending.

    @rose: I agree. Taxes are out of hand in BC. Moving from Alberta two years ago, I was shocked at the increased cost in some areas — auto insurance for one is not less expensive under ICBC than it was under the free market in Alberta, health care premiums are more here (and my “feeling” is that the wait times are longer than they were in Alberta).

    Thank you all for your comments. Even though writing to your MLA is a waste of time in terms of the response you’ll get, I like to think they’re at least keeping a tally of “pro-HST” and “anti-HST” correspondence they get (although maybe not).



  14. Visit My Website

    August 3, 2009

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    J Lane said:


    The more I think about it, the more I’m really frustrated. I still don’t think that the HST is a positive thing, but I think that *SOME* of the problems stem from the fact that the BC Government communicates things so poorly with people.

    I acknowledge that some of the things I thought in the beginning are misconceptions.



  15. Visit My Website

    August 6, 2009

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    Marie said:


    Mr Lane, I totally agree with you – how can HST be a postive thing when services that we usually pay 5% will suddenly be 12%?

    Besides writing to the MLA/Premier/Colin Hansen and signing petitions what else can one do? There is no legislation to recall the government, is there? Being lied to by Gordon Campbell/Colin Hansen partnership is one HUGE disappointment!!!



  16. Visit My Website

    August 7, 2009

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    J Lane said:


    There is recall legislation, but it’s darn near impossible to attain. You need to get 70%+ of registered voters in BC to force a recall. Seeing as there was a 49% voter turnout in the last election, it’s not too likely.



  17. Visit My Website

    August 8, 2009

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    Bill Tieleman said:


    Hi Jonathan – and thanks for your support in fighting the HST. The boilerplate BC Liberal MLAs’ response to HST complaints is pretty lame – as you have so clearly pointed out!

    For anyone who hasn’t yet signed up to the Facebook protest group NO BC HST that I created, it’s at: http://www.facebook.com/group.php?gid=105998706732



  18. Visit My Website

    August 8, 2009

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    brad said:


    hmm…..here’s a thought….if the MLA’s responses are Liberally plagiarized from someone else’s speaking notes/press release…..can ya charge them with Plagiarism?



  19. Visit My Website

    August 8, 2009

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    Steve Krahn said:


    Here’s an idea if we can’t stop this (most likely considering the Bankruptcy Olympics): Restaurants, hairdressers and self storage owners (that’s me) could sell Pre-HST coupons for services after the HST is introduced. I plan to incourage all my customers to pre-pay as much as they can before July 1 2010 so they can delay the inevitable. It’s not much but every bit helps.

    Here’s to a tax revolt! Get those Liberals OUT!



  20. Visit My Website

    August 8, 2009

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    J Lane said:


    @Steve I like it.

    I’ve given thought to a few options too, like incorporating in Alberta (make one of my friends there a director).



  21. Visit My Website

    August 10, 2009

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    John Gibson said:


    Mr Campbell. If you wish to help this Province Please QUIT NOW. This HST is only a cash cow for the already doomed winter olympics. And I do not wish my Provicial tax money to be used to pay people to work for the winter olympics (this should be illegal.



  22. Visit My Website

    August 18, 2009

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    Peter Bobberly said:


    http://www.youtube.com/watch?v=atiLnxSKmec

    #4 comedy video in Canada yesterday – pulp fiction parody.

    Post this video on your blog and share it with friends. The only way to stop the HST is to show
    what a joke it is.