June 13, 2011
HST SEEDS B.C.'S AGRICULTURE INDUSTRY

ABBOTSFORD – Changes announced to the HST by Premier Christy Clark mean the tax will be fairer on families while allowing industries like agriculture to continue to operate under the more efficient system.

The provincial government has committed that, should British Columbians vote to keep the HST, it will reduce the HST rate from 12 per cent to 10 per cent in two steps – dropping the provincial portion of the HST from 7 per cent to 6 per cent on July 1, 2012, and then to 5 per cent on July 1, 2014. This would mean B.C. families, on average, will go from paying about $350 more tax each year on routine expenditures to saving approximately $120 annually when compared to the old GST/PST system.

For the agriculture industry, sticking with the HST means local businesses are more competitive and can expand outside of B.C. - something that was hard to do under the previous tax system.

"In 35 years we've never had the opportunity to sell outside B.C. Since the HST was introduced, we have had traffic to our business from other provinces," says Dave Holmberg, President of Bobcat Country, Inc. "Plus, 90 per cent of our business receives input credits, which increases activity. This has created an immediate need for more employees."

To help offset the cost of the HST to B.C. families and seniors before the rate cut, the province would provide additional relief with one-time transition payments. Families would receive $175 for each child under 18, and seniors with a family income of $40,000 or less would also receive $175 (senior couples with family incomes under $40,000 would receive $350).

"These changes are the result of our consultation with 275,000 British Columbians," says Abbotsford South MLA and former Agriculture Minister John van Dongen. "We've worked hard to reduce the burden on families while retaining a tax policy that clearly provides significant benefits to farmers and agribusiness in British Columbia."  

To help make up the smaller revenue from a 10 per cent HST, the corporate tax rate would be raised from 10 per cent to 12 per cent. Holmberg says even with the changes to the HST, the benefits of the system still outweigh a higher corporate tax rate. "With the change from the PST to the HST our business increased and we made a profit. We're happy to pay more corporate tax because it means we're making a profit."   

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