B.C. gets interest break on HST transition

B.C. has five years to repay Ottawa its $1.6 billion transition payment, interest free.

B.C. Finance Minister Kevin Falcon

B.C. Finance Minister Kevin Falcon

The B.C. and federal governments have agreed to a five-year interest-free repayment schedule for the $1.6 billion harmonized sales tax transition fund, but the deal does not change the province’s deficit position.

B.C. Finance Minister Kevin Falcon said Wednesday the interest break will save B.C. $118 million in interest costs, since the money doesn’t have to be borrowed all at once to repay by a March 31 deadline. Instead Ottawa will accept five annual transfers of $320 million each.

The entire repayment is still being charged to the province’s books in the current fiscal year, which ends this spring. Combined with reduced provincial revenues and slightly increased spending, B.C.’s deficit for this year is forecast to be $3.1 billion.

The terms of the referendum where voters opted out of the HST require the province to restore the PST with the charges and exemptions that existed prior to July 2010. A panel of tax experts has been appointed to review the PST for possible administrative efficiencies when it is reinstated in the spring of 2013.

When the HST was rejected, the finance ministry estimated it would bring in an additional $600 million in revenues in each of the next two years, based on economic growth and extending the seven-per-cent provincial portion of the sales tax to a variety of services.

Former premier Bill Vander Zalm, who spearheaded the petition to repeal the HST, said both the federal and provincial governments are dragging out the transition period to benefit their bottom line and that of businesses.

Businesses will have to forgo input tax credits available under the HST, and convert cash registers and accounting systems back to collecting the GST and PST separately. Low-income B.C. residents will lose HST rebates starting in 2013.

The total cost to B.C. of going back to the PST has been estimated at about $3 billion. In addition to the transition fund repayment, and the foregone extra revenue, B.C. has to re-establish a provincial sales tax administration and audit department.

About 300 provincial tax collectors were transferred to the federal payroll when the HST took effect in July 2010.

Transition rules for businesses switching from the HST back to the former provincial sales tax are expected to be announced by March 31, the end of the current fiscal year.

Just Posted

These three kittens, seen here on Thursday, June 10, 2021, are just some of many up for adoption at the Chilliwack SPCA. (Jenna Hauck/ Chilliwack Progress)
VIDEO: Find Me My Furever Home – Three kittens at the Chilliwack SPCA

Kittens were in ‘rough shape’ when they came into the Chilliwack SPCA, now ready for adoption

Jean-Pierre Antonio
Article chronicling haiku in Japanese internment camp near Hope wins award

Tashme Haiku Club’s work was preserved and recently translated, authors write

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: Chilliwack family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

A new sign was installed at St. Thomas Anglican Church on Saturday, June 5, 2021 in Chilliwack. (Jenna Hauck/ Chilliwack Progress)
Community effort to install new sign at Chilliwack’s oldest church

‘We feel it’s a step in the right direction to bring the church up-to-date,’ says St. Thomas parishioner

Dennis Saulnier rescued his daughters, two-year-old Brinley (left) and four-year-old Keegan, after their truck was driven off the road and into Cultus Lake on May 16, 2020. Reporter Jenna Hauck has been recognized by the B.C. and Yukon Community Newspapers Association for her story on the rescue. (Jenna Hauck/ The Progress)
Chilliwack Progress, Hope Standard staff take home 7 Ma Murray awards

Jenna Hauck, Eric Welsh, Jessica Peters, Emelie Peacock all earn journalism industry recognition

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

Indigenous Services Minister Marc Miller is seen during a news conference, Wednesday May 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Indigenous child-welfare battle heads to court despite calls for Ottawa to drop cases

Feds are poised to argue against two Canadian Human Rights Tribunal rulings

The Great Ogopogo Bathtub Race has been held in Summerland as a fundraising event. Do you know which Canadian city introduced this sport? (Black Press file photo)
QUIZ: A summer’s day at the water

How much do you know about boats, lakes and water?

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A million-dollar ticket was sold to an individual in Vernon from the Lotto Max draw Friday, June 11, 2021. (Photo courtesy of BCLC)
Lottery ticket worth $1 million sold in Vernon

One lucky individual holds one of 20 tickets worth $1 million from Friday’s Lotto Max draw

“65 years, I’ve carried the stories in my mind and live it every day,” says Jack Kruger. (Athena Bonneau)
‘Maybe this time they will listen’: Survivor shares stories from B.C. residential school

Jack Kruger, living in Syilx territory, wasn’t surprised by news of 215 children’s remains found on the grounds of the former Kamloops Indian Residential School

A logging truck carries its load down the Elaho Valley near in Squamish, B.C. in this file photo. THE CANADIAN PRESS/Chuck Stoody
Squamish Nation calls for old-growth logging moratorium in its territory

The nation says 44% of old-growth forests in its 6,900-square kilometre territory are protected while the rest remain at risk

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

Most Read