[GB] Chinese families to pay an extra $2,688 in HST

Guest blogger: Gabriel Yiu, former BC NDP candidate for Vancouver Fraserview

To clearly stand out a guest blogger entry, all such headlines will begin with [GB].

During the last provincial election, the BC Liberal Party stated in black and white that they would not bring in HST. Just as they did not honor their promise in the 2001 election that they would not sell BC Rail but sold the crown corporation to Campbell’s good friend, Campbell’s Liberal government have no sense of honor and now they betray British Columbians yet again.

According to a calculation by Fairchild TV’s “26 Minutes Magazine,” a Chinese family of five would have to pay an extra $2,688 in tax after the implementation of the HST. Accordingly many areas of our living expenses, like restaurant, soft drinks, coffee, housing (new house, property management fee, maintenance and repair), beauty and hairdo, sports and exercise, school supplies, newspapers and magazines, movie, theatre, concert, local travel, environment friendly-appliances… all would have added to them an extra 7% HST.

Whether it’s giving birth (baby shower party/banquet), getting sick (non-prescription drugs, vitamins, traditional Chinese medicine and acupuncture), getting old (pension fund) or passing away (funeral service), through every stage of your life, you have to pay an extra 7% HST.

We work hard to raise our family. Taxes are regularly deducted from our pay cheques. Other than paying for all the living expenses, we also need to save for retirement. The most absurd point is that when we have saved and put our money into the pension fund, the Liberal government would tax us yet again with the HST!

According to the Investment Funds Institute of Canada, the HST is a tax on savings. It contradicts the goal of encouraging the public to save and it has a huge impact on people close to retirement. The IFIC calculated that a saving of $5,000 each year will lose close to $40,000 over a 35-year career due to the 5% GST plus 7%HST. This compounding of GST/HST each year adds up to eight years of savings.

Many citizens think that the HST is brought in to pay for the increasing health, education and social service expenses. Unless the finance minister lied to us, apparently this is not so. According to Colin Hansen, the HST is revenue neutral, meaning that government revenue would not be increased due to the harmonization. The $1.9 billion taken from consumers’ pockets each year will be given to corporations as tax cut.

Speaking as the owner of three small retail stores, I can tell you that the HST is bad for small business. First, all the supplies and products we purchase for re-sale purpose as well as courier service are exempted from paying PST. After the implementation of the HST, we have to pay the 7% extra sales tax on all supplies and services. It would take four to five months to receive rebate from the government, so cash flow is going to be more sluggish.

To a great many small businesses with small capital investment, we’re not paying much PST because supplies and services are exempted. It’s correct that we could claim the PST in purchase like computer or cash register machine but these are items that don’t need to be purchased on a regular basis. Nevertheless, to high-capital big corporations or resource businesses, the PST rebate would be quite beneficial. A University of Victoria economics professor pointed out that the HST could result in a tax saving of $140 million for the forestry industry annually while the oil and gas industry would get a tax cut of $80 million. Mining and other large corporations are also big winners. This is where the extra tax taken from consumers go; the government simply transfer it to big corporations.

Currently, merchants who collect PST for the government receive a commission as high as $2,376 per year, but it would be abolished after the sales tax harmonization. Worse, the extra 7% HST would have a negative impact on consumers. Small businesses would suffer a reduction of sales.

When the federal government brought in the GST in 1991, it was a blow to the restaurant industry, resulting in a 10% drop in business and a $50,000 average business loss per restaurant. As a result, numerous jobs and restaurants disappeared.

So why does Gordon Campbell want to bring in the HST? Why does he put shackles on consumers during these adverse economic times? Why does he want to increase the burden of British Columbians heavily? Do you really believe what the Liberals say, that the HST would create jobs, stimulate the economy and that this is the best the BC government could do for the economy?

The Liberal government has been giving away our public wealth to big businesses which also happened to be generous donors of the BC Liberal Party. The HST is simply yet another transfer of public wealth to big corporations. When the government has a surplus, the support to the big corporations comes from the treasury, but faced with a huge deficit, Campbell has to find a new way to support them.

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Disclaimer: Views expressed by guest bloggers are theirs and may not represent those of CIV.

By inviting guest bloggers to write here, I’d like to see us grow together with more diverse ideas and perspectives. If anyone believe the idea is cool, please don’t hesitate to submit your stuff to me. We use real names and identities here. Thank you.

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