Minister’s representation of tax facts not reality

MLA Chong's contribution to op-ed on HST a head-scratcher for Oak Bay reader

Re: HST Op/Ed (News, June 17)

Thanks for running parallel op-ed pieces by Ida Chong and Carole James. What struck me as inaccurate is Ms. Chong’s statement:

“We introduced the HST for . . . the benefit of B.C.’s economy. Under the PST, businesses paid sales tax on many of their input costs and passed those costs on to consumers in the form of higher prices.”

I have been a manufacturer in B.C. for more than 15 years. Under the PST, all the supplies and materials I required to produce my goods were PST exempt. If I sold those goods to a customer who used them as part of a project for resale, he did not pay PST to me. If my goods were sold to the final consumer, I was then obliged to charge PST and remit it to the government.

A later provision allowed certain manufacturers of taxable items to buy equipment and machinery PST free. This change made upgrading and/or expanding my business less expensive and no doubt, in some small way, stimulated growth in certain sectors of the economy.

Under the HST, I must now pay tax on all of my supplies and materials, so the costs of doing business have increased. It makes replacing older or purchasing new equipment more expensive, so I’m potentially less likely to reinvest in my business.

On sales of my goods that are destined for resale I must now charge HST, which makes my product more expensive to some of my customers. So, quite simply, my costs have increased and my products are more costly.

I don’t see how this benefits B.C.’s economy. What is more disturbing is Ms. Chong’s inaccurate description of the PST system. Whether it’s her own misunderstanding or misrepresentation is one matter, but if it reflects the government’s understanding of its own regulations, then that’s simply inexcusable.

Kerry Swartz

Oak Bay

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