PST outdated, costly, B.C. business leader says
Combining the provincial and federal sales taxes has been a priority of the B.C. Chamber of Commerce. Here, president and CEO John Winter explains his group's interest in HST.
Q: Why is this so important for the chamber?
A: It's largely because of the simplicity of it, avoiding the cost of duplication of efforts. It ultimately avoids the congestion the PST causes in the manufacturing cycle. We recognize that things like the PST are outdated, certainly inefficient and costly. The Maritime example has been very illustrative.
Q: What happened there?
A: The minute the provinces (Nova Scotia, New Brunswick and Newfoundland) converted to HST, investment grew at a rate beyond the estimates, and it was because they simplified the system and goods in the Maritimes were cost-efficient, compared to not cost-efficient before.
Q: If there are business that are not supporting the change, is there more education that needs to be done?
A: I don't know if support is where it should be or not. It's not universally supported. A couple of sectors are concerned about the effect on their industries in the short term. They had some of the same concerns about the GST, and I think they turned out to be unfounded in the long term.
Q: Do you understand the concerns of the businesses on the front lines, dealing with the customers who will now be paying more tax on certain services?
A: One of the risks the hospitality industry has enacted for itself is raising the awareness this tax will be charged, and raising the risk of negative feedback from the consumer. If you go out to eat in B.C., you see signs in restaurants that say you can sign a petition against the HST. The tax is going to happen, and the backlash may be real.
Q: Consumers will see they're paying more in tax, but may not see the price reductions HST proponents are claiming?
A: The whole notion of the embedded sales tax in the manufacturing process is something the opponents are having a difficult time grasping. The sense businesses will take any savings and not pass them along to the consumer, making the consumer the victim, is mistaken. It doesn't take into account the competitive nature of business in Canada. If a competitor takes those savings and passes them along as lower prices, the other competitors will have to do so as a response.
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