PST will be re-implemented April 1, 2013
- it will replace the HST that was put in place July 1, 2010
- the due date for PST tax remittances will move to month end to match GST remittances
- businesses will be able to register with their federal business numbers
- retailers will be allowed to refund tax to customers in a broader range of circumstances
- B.C. sales tax credit will be re-implemented
- rate of 10 percent will apply to liquor
- the provincial Taxpayer Fairness and Service Code will be updated, affirming taxpayers’ rights to courtesy, respect, fairness and timely tax appeals
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British Columbia’s ever-changing provincial tax structure continues to create challenges for the province’s farmers.
The B.C. finance department introduced legislation May 14 that will return the province to a provincial sales tax after last year’s referendum rejected the harmonized sales tax (HST) implemented in July 2010.
Reg Ens, executive director of the B.C. Agriculture Council, said he is hoping the government makes changes to the PST structure so it is less cumbersome than it was previously.
“When the HST came in, we were ecstatic,” said Ens. “It was good for business, it was good for industry.”
Then came the referendum to revert to the PST-GST system, which passed by a slim margin at 54 percent.
“What that’s saying is go back to legislation that was in some cases 40 years old,” he said. “That just doesn’t make sense from a policy perspective or a business perspective.”
The council is now lobbying the province to increase the exemptions for agriculture and simplify the rebate system.
Ens said that might be a challenge for the government because differences in the new version of the PST might be seen by the public as a broken promise.
Elaine Stovin, communications co-ordinator for the B.C. Cattlemen’s Association, said his group is also hoping for a more extensive list of PST exemptions for farms and ranches and a reduction in red tape associated with rebates.
“We’re hoping that it will model a rebate system similar to the GST,” she said.
Agricultural groups were dissatisfied with the PST structure even before the HST was enacted and were pushing for changes, said Ens.
Producers are constantly adopting new equipment, which might not have been on previous exemption lists.
Ens said this tends to penalize innovative producers.
Finance minister Kevin Falcon said the PST will be re-implemented, but new legislation will contain administration improvements.
“As promised, on April 1, 2013, consumers will only pay PST on those goods and services that were subject to PST before the implementation of the HST,” Falcon said when he tabled the legislation.
“All permanent PST exemptions will be re-implemented, and consumers will not pay PST on food, bicycles, memberships or personal services like haircuts and more.”
He said work will continue on the list of exemptions using input from the business sector. A final proposed version of the legislation is expected in the fall, before the next provincial election in May.
The B.C. agriculture sector is also lobbying on another tax front. The carbon tax, implemented July 1, 2008, was phased in and now amounts to 7.2 cents per litre on gasoline. Carbon taxes also apply to diesel, natural gas, propane, coal and jet fuel.
Ens said his estimates indicate the agriculture sector will pay $29 million in 2012-13 in carbon taxes.
“Our position on that is, a carbon tax and trying to reduce carbon is a good thing but the effect or the impact of the carbon tax is not achieving what the government wanted it to do, or doesn’t appear to be changing what the government wanted to change. And it is making it uncompetitive for our businesses.”
The agriculture council said B.C. is one of only a few jurisdictions in the world that has a carbon tax, and the only one that applies it to food production.
“Taxing the production of food is not achieving society’s best interests,” said Ens.
Stovin said the BCCA agrees. There are few alternatives to gas and diesel for farmers and ranchers, and most have already reduced their energy consumption as much as they can.
The large B.C. greenhouse industry lobbied against the carbon tax from its inception, and although it obtained a grant to offset costs, Ens said that isn’t a long-term solution.
He said any greenhouse operations planning expansion are doing it in the United States or on the Prairies, in part because of B.C.’s onerous taxes.
