VANCOUVER – B.C.’s finance minister introduced a new-and-improved provincial sales tax Monday to replace the harmonized tax that was defeated in last year’s fractious referendum, but he acknowledged he’s still not a fan.
Kevin Falcon once called the PST a stupid tax, and when asked if this version is an improvement, he responded: “Yes. It’s better-stupid.”
Taxpayers in British Columbia will officially begin paying the old provincial sales tax in addition to the goods and services tax starting April 1 next year.
Falcon said the return to the PST brings back all the old exemptions, meaning consumers will no longer pay seven-per-cent tax on restaurant meals, gym memberships, movie tickets and haircuts.
“All the familiar exemptions will be back: bicycles, books and magazines, children’s clothing and footwear, food and dietary supplements, non-alcoholic beverages, used clothing,” he said. “All of the old exemptions will continue to be in place.”
Bill Vander Zalm, the former premier who led the fight to have the HST dumped, said he’s gratified the B.C. Liberals are sticking to their promise to return to the PST.
But he said he remains concerned the new system is being ushered in through government regulations instead of allowing the changes to be debated in the legislature, thereby allowing the public to have input.
“The people are being left out of the process,” he said.
Falcon said the full list of PST exemptions will be included in regulations this fall. He said the government will conduct business outreach seminars this fall to help businesses familiarize themselves with the return to the PST.
The major improvement to the new PST is that it provides online access for businesses, making it easier to register and update accounts, he said.
“We’ve tried to improve it and update it, so it’s going to be a lot better, and it is for small business in particular to manage and deal with,” Falcon said. “We’ve made sure it’s all online, so that we’ve got a better PST, but I would argue it’s never going to be as good as our previous tax.”
Opposition New Democrat finance critic Bruce Ralston complained that at 19 months, the government is taking far too long to unwind the tax. It took 11 months to introduce the HST.
The tax revolt began in July 2009 when it was ushered in as policy by then-premier Gordon Campbell, who had made the deal with Ottawa just after the Liberals won their third straight B.C. election.
Campbell’s lack of consultation with the public triggered an uproar, but the tax was implemented nonetheless one year later.
Vander Zalm tapped into the anger with a provincewide repeal petition to kick the tax to the curb, ultimately garnering more than half-a-million signatures and forcing a referendum.
Campbell’s popularity plummeted and he announced his early retirement in November 2010, opening the doors for the Liberals to make new moves. Premier Christy Clark came out in favour of the tax, but vowed to do the public’s bidding.
Despite the government’s promise to drop the tax two points in hopes voters would give it a pass, 55 per cent of 1.6 million British Columbians who voted via mail-in ballot last August told the government to get rid of it.
The Liberals made good on their promise, but were forced to return the $1.6 billion Ottawa had handed over to transition the tax.
— With files from Dirk Meissner in Victoria