British Columbia to Follow Ontario’s Harmonized Sales Tax Lead

As of July 1, 2010, B.C. to become an HST province, slated to boast the lowest HST rate of provinces that have harmonized

Back in early April, when I was fixated on the ostensibly acausal connections among Facebook fodder, an obsession with transaction tax issues, and biology, I structured the discussion around the move for a harmonized sales tax scheme in Ontario. That subject felt purely academic and was essentially painless to write about, having no near term plans to visit that province.

But now it’s hitting far closer to home, to a land I’d visit every weekend if other short car trips didn’t beckon.

A 12% harmonized sales tax plan was made public about a week ago for British Columbia, the fair province to my north and, as announced by Premier Gordon Campbell and Finance Minister Colin Hansen, is scheduled to go into effect July 1, 2010. The plan calls for a harmonization of the 7% provincial sales tax (PST) with the 5% federal goods and services tax (GST), resulting in a 12% harmonized sales tax (HST).

“Once fully implemented, the single sales tax will make B.C. one of the most competitive jurisdictions in the industrialized world for new investments. The proposed changes are subject to approval by the parliaments of Canada and British Columbia,” according to their joint release.

It’s widely reported that this move will put pressure on the remaining provinces who have thus far maintained separate taxing schemes (Manitoba, Prince Edward Island, and Saskatchewan) to follow suit.

There’s been so much press, quite a bit of it to the negative, in the week and a half since it was announced that it’s tough to capture it all here, but some of the most comprehensive coverage can be found here, here, here, and here.

Issues include whether the HST will prove itself regressive, whether businesses will really stand to benefit from the simplification of the transaction tax regime, whether more goods and services will be brought into the taxing net, as well as many other key concerns.

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