Following along other provinces who currently have a HST, Premier Gordon Campbell says the tax will be a major cost savings for business, which will be able to claim HST rebates in virtually all cases.
The province had rejected the idea of an HST several times, but Ontario's decision to adopt a blended sales tax altered that calculation in at least two ways. The federal government loosened the rules governing a harmonized tax, but more critically for B.C., Ontario's move opened up a competitive gap that would have threatened to drain corporate investment eastward.
Once fully implemented, the HST will reduce sales taxes paid by business by C$1.9 billion, and save companies C$150 million in administrative costs. For large businesses, the changeover will be gradual, meaning their savings will take longer to full materialize.
But the savings for business will become new costs for consumers. A number of basic goods will be exempt, including basic food items, children's clothing and shoes, diapers, booster seats, car seats, feminine hygiene products and books.
A slew of goods and services formerly not subject to the HST will fall under the umbrella of the new combined tax, including hair cuts, restaurant meals – and far larger expenditures such as new homes. B.C.'s move to the HST comes as the province grapples with a growing budget deficit and some feel this could prove to be a solution to those fiscal woes.
Source: The Globe and Mail
