Soft drinks are exempted from provincial sales tax along with other grocery store items. (Wikimedia Commons)

Extend sales tax to soft drinks, B.C. advisory group says

Province not extending PST, or scrapping homeowners grant

A B.C. government tax fairness advisory panel has recommended extending provincial sales tax to all non-alcoholic beverages except for milk and plain water.

The task force, set up to look at alternatives to Medical Services Plan premiums, also recommends eliminating the homeowner grant and replacing it with a refundable tax credit.

The report, completed in March, was released Thursday by the finance ministry without comment on the recommendations. It says soft drinks should never have been exempted from PST along with the rest of foods, because they have little nutritional value.

The report also recommends introducing a “value added tax” similar to the harmonized sales tax that was rejected in a province-wide referendum.

The finance ministry issued a statement Thursday saying that the drinks tax, changes to the homeowner grant or changing the PST to make it similar to the harmonized sales tax are not being considered.

The task force noted in its interim report that a payroll tax to replace MSP premiums would affect business competitiveness. Finance Minister Carole James has moved to implement the payroll tax next January, while cutting MSP premiums by half at the same time.

The report calls the homeowner grant for property taxes a “regressive feature of the tax system that is fundamentally unfair and would be improved by using the income system to provide more progressive tax relief to homeowners and renters.”

It recommends an enhanced sales tax credit and carbon tax credit for lower income people, funded by the revenue from extending PST to most non-alcoholic beverages.

The report was produced by University of Victoria professor Lindsay Tedds, UBC professor David Duff and former NDP finance minister Paul Ramsey. The task force was set up last fall to find ways to replace government revenues lost due to eliminating MSP premiums. That was pre-empted by James’ February budget, which imposed a payroll tax.

The “employers health tax” takes effect in 2019 at 1.95 per cent of payroll for businesses and organizations with payrolls of more than $1.5 million. A lower rate applies for payrolls between $500,000 and $1.5 million, and those below $500,000 are exempt.

The payroll tax applies whether employers pay their employees’ MSP premiums or not. James emphasized that while property taxes may go up, individuals stand to save $800 a year or more if they have been paying their own MSP premiums.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

‘Police are ready’ for legal pot, say Canadian chiefs

But Canadians won’t see major policing changes as pot becomes legal

Your Mountain Minute for October 11

Golden’s weekly 60-second news recap… Continue reading

Each week, we ask municipal council candidates an important question

How can council support small business and entrepreneurship in the community?

Bizarre Review: Inside Out lives up to its namesake

Inside Out will probably have you feeling all sorts of feels by… Continue reading

UPDATE: Trans Canada Highway closed at Three Valley Gap

A downed powerline is being repaired

Rick Mercer says pot is ‘excruciatingly boring’

Comedian hopes Canadians will move onto something else once marijuana is legalized

Canada Post union issues strike notice; rotating strikes could begin Monday

Union says rotating strikes will begin if agreements aren’t reached with bargaining units

Carole James avoids questions on B.C.’s payroll tax (with video)

Green MLA Adam Olsen cites huge tax increase for local business

Three Nelson marijuana dispensaries to remain open after legalization

Nelson’s police chief has no plans to close them down

2 charged for feeding B.C. bear Tim Horton’s timbits

Court documents show that Randy Scott and Megan Hiltz have both been charged with feeding or attempting to feed dangerous wildlife.

Killer-rapist Paul Bernardo set for parole bid after 25 years in prison

Bernardo’s parole hearing at the Bath Institution is expected to attract numerous observers

Feds aiming to select preferred design for $60B warships by end of month

Defence insiders say the government wants to select a design by the end of the month from among three options submitted by several of the largest defence and shipbuilding companies in the world.

B.C. city wants control over its cannabis advertising rules

Without a say, towns and cities risk Washington-State-style flood of advertising, proponent says

Defence cautions against mob justice in Calgary child neglect trial

Jennifer and Jeromie Clark of Calgary have pleaded not guilty to criminal negligence causing death

Most Read