When British Columbians rejected the Harmonized Sales Tax in the 2011 referendum, they were promised things would go back to the Provincial Sales Tax normal.
But an independent panel has recommended adding taxes to things that virtually every B.C. family buys – a plan that will increase our already sky-high cost of living.
The report from the Expert Panel on B.C.’s Business Tax Competitiveness includes recommendations for adding the seven per cent PST to basic telephone and cable TV service, snack foods and school supplies – items that all used to be exempt. It’s a $159 million tax grab – even if the government follows another panel recommendation to give $25 million more in sales tax credits to lower income families.
Ask a parent about the cost of school supplies, and you will likely hear it’s a major struggle every September to get items on the ever-growing supply list. It’s not just pencils and notebooks anymore; schools ask parents to purchase emergency supplies like foil blankets, light sticks, tissue, water and food. Adding another seven per cent of tax to those purchases will make things even worse.
The panel claims it’s unfair to satellite TV users to tax them but not tax cable; they also say telecommunication bundling makes it difficult to collect the tax. No arguments here, but instead of recommending a tax cut for satellite subscribers, they want to spread the misery to all.
They’re also after your Smarties. While some suggest that taxing snack food will curb obesity, neither research nor practice has bore that out. Even leading B.C. doctors agree that taxing snack food will do little, and that it is incredibly difficult to implement.
“Research actually shows little correlation between individual behaviours and body weight: many who seldom consume such foods are overweight while many who do, are not,” said Dr. Paul Martiquet, an adjunct professor at the UBC School of Medicine and the Medical Health Officer for Powell River, Sunshine Coast, Sea to Sky, Bella Bella and Bella Coola.
Added Dr. Lloyd Oppel, head of the B.C. Medical Association: “I think it would be difficult to draw up a list of things that were truly bad versus things that are truly good and be able to implement a tax on that basis.”
Denmark tried a food tax but killed it after one year, noting it increased prices and administration costs and put Danish jobs at risk. Many Danes were crossing the border into Germany to avoid the tax all together.
Even the Ministry of Finance officials assigned to crunch the numbers for the tax panel knew this was simply a tax grab. In a note unearthed by a Freedom of Information Act request, bureaucrats called the snack food tax, “purely a revenue measure,” and remarked that it would be very complex to implement.
Whether HST supporters like it or not, the public spoke and the PST is coming back. It’s not a great tax, but it’s the one democracy wants. Altering exemptions now will be ignoring the referendum results and raise the anger of already overtaxed B.C. residents.
Adding PST to previously non-taxable items is a tax grab, plain and simple, and will increase tax burden and cost of living, two things British Columbians are already groaning under. If this burden is as important to the government as they claim, Finance Minister Michael de Jong must flat out reject those proposals.