So will those little containers at the store tills now have nickels in them rather than pennies?

As far as charging more, I believe everyone had their tills and point of sale equipment set so that tax was rounded up and down the standard way. So, something which would be calculated out to $1.024 cents would be rounded down to $1.00 and $1.025 would be rounded up to $1.05. I would think it would be done automatically in most cases.

Easier just to set the prices higher Gus so the till doesn’t have to think. So what about the folks that never use cash now? Are the banks going to round up or down our bank accounts too? So in reality the penny isn’t going away there are 100 of them in every dollar. Maybe businesses should set their prices so they don’t have to deal with nickels, dimes and quarters too. It sure would make cashing out quicker at the end of the day.

I am still trying to figure out how to get the .9 of a cent if I were to buy only one litre of fuel… ;)

They should not be allowed to keep the 12% on privately sold automobiles. This is a huge hit for those who can’t afford to buy new or from dealerships.

The HST was great for business and being a consumer tax, it was fairly easy for consumers to limit how much they paid in HSt. As a small business owner, I am saddened by the lack of foresight by the general public. We all need small business to succeed. If only the average joe, who has never owned a business, could understand what small businesses are up against when it comes to running a business. Maybe that is something they could teach in high school, “The Realities of Owning Your Own Business” aka “What You Should Know About Your Employer and How Much They Pay to Be Able to Give You a Job.”

With the transfer of tax burden getting more and more focused on the average joe, just how long do you think your small business would survive with less and less people able to afford your products?

I would like to see an actual breakdown of the TRUE costs of the PST/GST model versus the HST. A nice independant study from someone who has no stake in the results.

Merc,

Why, it would change nothing and therefore be a waste of money. I agree with bornandbred, it was way easier and cheaper for businesses. Most may not have lowered their prices becuase of the HST, but, they didn’t raise them. Now they will, to cover the increase in tax and the increase in processing costs.

If small business decides to raise prices, Joe Public chooses to buy elsewhere. Simple.

Quoting Ra McGuire…. round round we go….

This would have been so much easier had the Gov’t not been so greedy. They could have very easily made it a 10% HST, but no, they had to see how far they could push it.

The HST is a superior system, but the Liberals simply performed an unbelievably seedy and shoddy implementation.

Keep raising prices and you won’t have customers. Plain and simple. If your business shuts down…then that would be unfortunate but if I can’t buy your product because it is too expensive then who’s fault is that?

“Easier just to set the prices higher Gus so the till doesn’t have to think”

The till will still have to go through the exercise I have described. The only way to get rid of pennies being in the transaction at any time is to set prices in increments of 5 cents .. so no more $1.99 to make it look as if it is under $2.00. It will have to become $2 or $1.95.

In addition, all taxes will have to be in increments of 5% … so GST already works. 7% PST will not cut it. So it needs to go to 5% or 10%.

So I think we will be stuck with the till rounding off a total from say 7 items purchased, some taxable by a single tax and others by both taxes and others not txable.

This rounding up/down by the register just screams problems for me. I can see the stories now where business registers were “accidentally” programmed to round up on everything.

People are going to have to be super vigilant with their receipts.

Besides with Debit/Credit transactions being the majority, there should be no auto rounding up/down at all. One cent is still one cent to a plastic card.

“but, they didn’t raise them”

Very few raised anything at a time when a major economic corretion was taking place in the world. There are far to many variables to determine causation of an event in a socio-economic setting.

“This rounding up/down by the register just screams problems for me. I can see the stories now where business registers were “accidentally” programmed to round up on everything.”

Good Lord!!!!

It takes place right now!!! It is just that only a penny is at stake. So now it will be 5 cents on a $203.76 total purchase. They will not round it off to $203.80 … but if they did, who cares?

Today’s nickel is comparatively valued the same as say a 1960 penny.

You woul not be able to survive in a country or a time when inflation is at 1000% a year …. you would still be worried about totally worthless cetns … excepot if they were made of copper and you would not find any around since they would be sold for $50 each …… ;-)

“then whose fault is that.”

It really depends. Most businesses do operate for a thing called profit (despite what a lot of posters here seem to think) and are not merely supply posts or places for people to work. When costs go up you have one of two options you increase your prices or decrease your profit. As far as profit goes you can only drop it so much before your are essentailly working for nothing, having all the risk of an owner with none of the benefit. You then close, losing everything and people like merc say you shouldn’t have been so greedy.

Why is it that when a business owner wants to make a decent living he is a greedy pig but when an employee seeks a raise they are just trying to get their fair share?

You’ve missed the point Porter. Why is it that when we piss and moan about being taxed to death as individuals it seems like we’re the bad guys. However if a business owner pisses and moans about it then somehow its ok?

People realise that businesses are what make the economic wheels turn. My point is that if you continue to transfer the MAJORITY of the tax burden over to ordinary citizens AND then increase prices (like most businesses seem to do), you simply will have less and less customers around to support those businesses.

The current model is broken. There is going to be a major economic shift in the next few years and regular folks are going to be left out in the cold.

I take issue with this statement
“If you set aside the argument that meals will cost less and some other goods will cost less, the tax itself was designed to extract more money from the average taxpayer, hence the reason for the little cheques that you received in what was a means of bribing you into thinking it was a good deal.”

The only people who got the little cheques, were those with low incomes, 20 to 25K. They are worse off now. A family of say 2, with a 25 K annual income, got $460.00 from the prov gov’t. Now they will get $150.00. They are $310.00 poorer. Take that $310.00 and divide by .07, and the result is $4,428.57.

That’s how much a year that family of two has to spend on items that now have HST, and after March 31st will only have GST, in order to be better off. There’s not that many items that qualify. Bicycles, restaurant meals, kids clothes. Remember hydro and nat gas got credits for the built in HST. If they make 25 thousand, they probably spend 10,000 on rent, another 2,000 on utilities, and then the cpp and ei probably takes another 2,500 off of them. At the end of the day, they lost when they voted out the HST. Kind of like how the Tea Party in the U.S, convinced poor Americans they were better off with no health care, rather than being told what doctor you had to go to paid for healthcare.

However, generally your article is correct. The taxes were shifted from business to the consumers, and the government did take in a billion more than they expected. They could have adjusted the rate downward to make it neutral, but they chose not to.

So, if you are of the opinion money is better in the hands of consumers than business, this was a smart move. However, if the business is competing in world markets, money in the hands of local consumers means nothing to them, and they just become less competitive globally and interprovincially now that the largest provincial economy – Ontario – has the HST.

“The second issue is the elimination of the penny, now if you think that any of the business in Canada will drop their prices and “round down” to the nearest nickel, you had too much turkey at Christmas.”

Uh, Ben… The penny will always be legal tender, unless you hae information otherwise.

If you pay cash and have the correct change, you will pay to the penny. Same with paying by debit or credit.

What’s not clear is when or if stores will eliminate the penny from their cash registers. If customers are still using pennies to pay for goods, retailers will always have to accept them.

No they won’t have to accept the penny they will just say cash them in at your bank.

Gus it will be easy for places to set there prices post tax so that it is even. Lets see dollar store will charge .89 cents and round it up to a dollar after tax or 1.78 and round it up to 2.00. Or 4.46 and round it up to 5. Gone are the days of 1.99 !

NoWay: “No they won’t have to accept the penny they will just say cash them in at your bank.”

Source?

The HST was regressive tax policy by the BC regressive liberal party.

Facts are that under the BC regressive liberals we now pay more in MSP premiums than all the corporations pay in corporate taxes… and not only that but students also pay more in tuition than all the corporations pay in corporate taxes as well.

Its regressive tax policy designed to give tax breaks to rich multinational corporations that use this province and its resources to increase their off shore profits at the expense of the middle and low income earners.

ski50. Do you really beleive that the Government paid the low income people enough money to cover thier costs of the HST??? Remember we are talking about the Campbell Government here. I sincerely doubt that they rebated enough to cover half the costs of these low income people.

As usual those who support the tax downplay what it actually applied on, so we have to believe that they actually dont know, and therefore their opinion should be take with a grain of salt, or they do know, but choose to muddy the water so that they can continue to support a regressive tax, that benefits business and corporations but screws consumers.

There were some 110 items that were exempt from the PST but were subject to the HST. So these exempt items were increased by 7%.

Restaurant meals was a big one. If a family of 2 spent $50 dollars per week in a restaurant they would pay a additional $182.00 in taxes.

If they got 8 haircuts a year they would pay approx $28.00 more in taxes.

If they golfed 20 games each per year they would pay an additional $112.00

A season hocky ticket for 2 would increase thier taxes by $70.56. and on and on it goes.

Internet, admission fees, membership fees, movies, theatre, bus fares, magazines/newspapers, taxi fares, airline tickets, music lessons, skiing, parking, coffee shops, fast food, beverages, vitamins,school supplies, animal feed, veterinarian, physiotherapy, bicycles, accounting, legal fees, concert tickets, funeral services, helmets, life jackets, first aid kits, smoke detectors etc; etc; etc;.

They might not get their rebate cheque, but at the end of the day, at the very least they will break even.

There is no justification for the HST other than what Carole James the ex Liberal Finance Minister said. **The HST is a $2.6 Billion dollar tax transfer from business and corporations to consumers**

Need I, or anyone else say more???

The Liberals got caught with thier pants down. Reminds me of the rap song.

Pants falling down, pants falling down, looking like a fool with your pants falling down.

The HST had to go because it was a betrayal of our democratic system of government and was implemented with conniving arrogance that should have been considered illegal IMO.

The tax transfer was just the kick in the teeth to the working middle class.

Furthermore corporations get the better of the small business because large corporations in house all their services and don’t have to pay HST on their accounting bill, marketing, and other related services… small business on the other hand paid those costs of services and the HST that was applied to them (which was exempt under PST). Its about enabling a competitive advantage for monopoly capitalists at the expense of their small business competitors. HST was anti free enterprise.

PS. Should read Carole Taylor, ex Finance Minister for the Liberal Government.

Strangly enough Carole James was against the HST.

We can rest assured that Corporations in BC will continue to do well, and make huge profits just like they have always done.

There will be absolutely no competition to BC from Ontario. That was the biggest line of BS ever put out. What about Quebec??? They had the HST since the early nineties, did they put us out of business??? Not bloody likely.

People have to stop beleiving what the Liberal Government of BC is telling them. They have basically sold us out, to big business, and corporations. Why is it so hard for some people to understand that they have been conned????

Where is the HST wrecking crew to-day. Gone. Why? Because the writing was on the wall, stick around and we will kick your ass so far out of politics, you will never return.

The three main players in this misbegotten drama, Campbell, Hansen, Falcon, got off easy. They saw that the ship was sinking and they got out, along with some of thier cronies. Why are we not surprised that they **cut and ran**. If we look at the make up of thier character we can see why they would not be around for the serious business.

The remnants of the Party will try and jig the next election. They have already started with the line **we will balance the budget**. The only way they can balance the budget is to use questionable accounting procedures. Do you think the **new** Liberals would do that?? Lets wait and see, and then head for the polls.

Eagle, small business HST paid on accounting services is an Input Tax Credit, as are all other payments subject to HST made by businesses. What is paid in HST by the business is deducted from what is collected in HST from the ultimate consumer, US, who end up paying the tax.

True, a business that employs its own accountants doesn’t pay HST on what they pay their own ‘in house’ accountants because there’d be no point, they’d only be getting it back anyways. It’s akin to a bank opening a new branch after constructing the building and equipping it ~ it doesn’t ‘borrow’ the money from itself at interest, interest that it’s simply going to be paying back to itself. There’d be no point.

Those in business who are wont to sing the praises of the HST should realise it was far less of an advantage to business than imagined. With PST, any business’s Capital Costs INCLUDED the PST in computing Capital Cost Allowance and was fully recovered through allocations for depreciation.

This increased depreciation was an expense that lowered the business’s reported net income, on which Federal and Provincial Income Taxes were levied, saving the business some Income Tax.

With HST, the tax is recovered as an Input Tax Credit, and not included in depreciation allowance, and Income Taxes paid will be higher.

The only businesses that really were advantaged by the HST were the Banks. ALL the rest lost on it far more than they gained, and especially those who sell product to BC consumers.

While we are getting rid of the cent, how about eliminating the mill? That is the cute .9 added to the posted price of gasoline. It was first posted as a coy way of John D. Rockefeller extracting an extra cent from buyers of gas by making them think the price was less than it really is.

And maybe we could encourage stores like Sears from advertising items with prices like “$7999.99 to “fool” us into mentally rounding down instead of up.

Getting rid of the cent is simply one more way towards pushing us into being a ‘cashless’ society. Which wouldn’t be so bad if the actual costs we pay TO PAY approximated what they are using cash. Even taking the advantages of cashless transactions into consideration I believe we’re still paying substantially more. Removing the penny may help level the playing field, but it’s really leveling it by increasing costs to the consumer, not lowering them.

Ok, I just read an article that said essentially:

– The penny will be legal tender ‘indefintely’.
– At some point in the future, retailers will stop accepting the penny.
– Cash purchases would be rounded up to the nearest nickel (at some point).
– Credit and debit purchases would remain to the cent.

sardonic: “While we are getting rid of the cent, how about eliminating the mill? That is the cute .9 added to the posted price of gasoline. It was first posted as a coy way of John D. Rockefeller extracting an extra cent from buyers of gas by making them think the price was less than it really is.

And maybe we could encourage stores like Sears from advertising items with prices like “$7999.99 to “fool” us into mentally rounding down instead of up.”

The sad thing is that studies show that consumers are indeed ‘fooled’ by this tactic. There’s one reason retailers use the 9’s. They work.

@JohnnyB
So I guess the consumers that use their debit cards will have to pay attention to the till on whether they were rounded up or charged to the exact penny. I doubt the retailers will have a debit price and a cash price.

“I doubt the retailers will have a debit price and a cash price.”

The article did say that debit and credit purchases would remain to the cent, so it seems to indicate there would be two different prices, depending on how you paid.

“I doubt the retailers will have a debit price and a cash price.”

An interesting doubt, based on what?

In the USA many/most gas retailers have a separate credit, debit price and, in some cases, a cash price.

http://blogs-images.forbes.com/halahtouryalai/files/2011/10/1021_gasoline-cash-credit_400x280.jpg

“Cash purchases would be rounded up to the nearest nickel (at some point).”

Actually it states will be 6 and 7 cents will be rounded downward and 8 and 9 will be rounded upward.

I rarely use wikipedia as an authoritative, but I do use it to give a rough overview of a topic and then explore further if it is important to quote autoritative sources.

I find the linked wikipedia page to be interesting since it describes the number of systems there are out there on this planet … including getting rid of 5 cents in New Zealand and 10c and 25 cent and 50 cent, etc.

It only stands to reason that as money inflates the units actually change with lower value money being removed and higher value money being added.

The question might be when will we be dropping the $5 bill and adding that as a coin?

http://en.wikipedia.org/wiki/Swedish_rounding

nad

An authoritative page for the purists….

http://www.mint.ca/store/mint/learn/eliminating-the-penny-6900002

There isn’t a cash/debit price now vs credit card so why would we assume there will be one later? Have you ever made a purchase where the retailer said “oh you are using a credit card?” That will be 2% more!
Canada is not the US!

“Have you ever made a purchase where the retailer said “oh you are using a credit card?” That will be 2% more! “

Guess what? When you make a purchase by credit card, it’s an extra cost to the retailer, usually as a percentage. Yes, in the US, they often pass that cost onto the consumer.

In Canada, we’re just not used to separate pricing based on payment method. It doesn’t mean it will never happen here. The elimination of the penny just might start us down that road.

Actually while I’m thinking about it, there is even a cost to the retailer for accepting debit payments.

Penny FAQ:

http://www.cbc.ca/news/business/story/2012/03/30/f-penny-faq.html

And as gus mentioned:

“The 2012 federal budget states: “The government expects that businesses will apply rounding for cash transactions in a fair and transparent manner.”

The rounding will not be done on single items but on the total bill of sale. If the price ends in a one, two, six, or seven it gets rounded down to 0 or 5; and rounded up if it ends in three, four, eight or nine.

Businesses will not need to adjust their cash registers.”

There is indeed a cost to the retailer for accepting debit payments. There’s the rent of the POS terminal at around $ 40 a month, plus HST, plus the paper it uses to print out the customer’s receipt, the business’s receipt, and the batch closing tally at the end of the day. Those things love paper more than a pulp manufacturer! Then there’s a standard $ 10 per month minimum charge to the service provider. And if you go over a certain number of transactions, a further charge for each transaction.

With credit cards, it’s anywhere from 1.8% to 3.5%, or more, of each sale that goes as a discount fee to the service provider. Based on the volume of business the merchant puts through. The greater the sales the lower the rate. The discount fee is taken on the sale PLUS the HST.

When you sign up to accept Mastercard or Visa credit cards you agree NOT to charge a higher price to customers who pay that way, over and above what you’d charge if they paid cash.

Canadian Tire gets around that by giving cash paying customers Canadian Tire Money. This discounts the normal price, (albeit on some future purchase), which anticipated credit card charges have been worked into, and would otherwise penalise those who pay cash.

“When you sign up to accept Mastercard or Visa credit cards you agree NOT to charge a higher price to customers who pay that way, over and above what you’d charge if they paid cash. “

That makes sense. From a credit card company’s standpoint, it would be bad for business to charge extra to use their cards. The retailer just buries the cost of accepting credit cards in their goods and/or services. Nothing is free.

Exactly so the retailer is going to set their prices in their favour! Wouldn’t you?

Yeah, you’re both right. It does penalise the customer who pays cash though, or by debit card, in comparison to payments by credit card.

Canada is apparently subjected to fairly high discount rates on credit card purchases compared to other countries, where what can be charged is regulated.

If you took an average discount rate for a small business of 2.5% of every credit card sale, that’s an annual interest rate of over 30% considering the average ‘grace period’ is something like 27 or 28 days.

The Banks that own Visa or Mastercard are, in essence, ‘lending’ the merchant the money that covers the sale until the customer pays them.

If that customer is not what they call an “abuser”, like most of us who pay our balance owing in full before the due date are termed, and runs it over, the interest they then charge the customer accrues from the date of the sale. So they ‘double dip’.

They say the rates are necessarily high because of the incidence of fraud. But when some poor backbench MP, who finally realises he’ll never make Cabinet, and has been in Parliament long enough that his over-bloated pension is secure, ever deigns to do his duty on a ‘Banking Committee’ or such like charged with ensuring ‘fair’ banking practices, and has the temerity to ever question the bankers on credit card fees and discount rates he’s immediately stonewalled.

The evasiveness of the answers given are reminiscent of Paul Martin trying to explain why the Bronfman trust fund was allowed to be transferred to a Caribbean tax haven tax free, after Revenue Canada tax experts determined in an advance ruling that it would be taxable.

“Canada is not the US!”

Understood. I get that comment a lot. PG is not Kelowna. BC is not Ontario. Canada is not the US. North America is not Europe. BUT, people in all those places use charge cards, debit cards, and cash AND, I refuse to limit my information to that provided by the locals. There is a whole world of experience out there to draw on. :-)

I was stating the fact that it has becoming an issue in the USA where almost 10 times the number of people residing in Canada are affected and the economy is not doing quite as well as in Canada.

Often what happens in the USA with consumer law, will move across the border if it makes sense to Canadian people and Canadian governments.

Here is an article from the goode olde US of A that explains what is happening there. I suspect the same is happening here.

http://www.cnbc.com/id/46993884/The_Cost_of_Convenience_Bank_Fees_Driving_Up_Gas_Prices

“We first saw a spike in gas stations rewarding consumers who pay with cash with lower prices during the time when fuel prices spiked in 2008. The practice went on even though it was highly DISCOURAGED by the policies of Visa , MasterCard and American Express.”

Notice the word “discouraged”. The USA does not take price fixing lightly. Note in the linked article it mentions there is a pending antitrust lawsuit for alleged price fixing.

The linked article goes on:
“When someone uses a credit card at a gas station, it typically adds nine to ten cents a gallon to the price,” said Douglas Kantor, a partner at Steptoe & Johnson. “That is more than what the gas station makes after its expenses. So now, every year since 2006, the industry has made less money than they have paid in card fees.”

“The National Association Of Convenience Stores published a report this week suggesting interchange fees are rising much faster than gasoline prices. It finds fuel prices rose 80 percent between 2004 and 2011, while the fees charged to the industry surged 180 percent during the same time period”

“Federal lawmakers have been clearing the way for merchants to set prices depending on the method of payment. The Durbin amendment of the Dodd-Frank Act took effect in October and Department of Justice actions have favored a retailer’s right to discount for cheaper cards or forms of payment. There’s also a pending antitrust lawsuit for alleged price fixing of interchange fees.”

The HST was voted out by a very narrow margin and “the people speaking loudly” certainly does not apply!

Socred you missed the point that the HST is a subsidy to large corporations at the expense of small business.

Sure the HST on accounting services as other services is seen as an input credit. No argument there.

But HST is part of the billing process. If a private service provider is competing with the in house service of a large corporation they are at a 12% disadvantage right off the get go. Its not a level playing field. This leads to monopolization and is anti free enterprise. The 12% they have to charge comes out of surplus value and if value margins are tight it prices them out of being able to provide the service… its not a tax on profits, but on sales.

The monopolists have a 12% advantage keeping services in house. In Europe they have a 24% advantage and in Europe entrepreneurial activity is almost dead as they simply can not compete with the in house advantage of the large conglomerates.

Free enterprise is dieing a quick death in Europe as a result of their sales tax policy as opposed to a progressive income tax policy. Soon they will all be slaves to the corporate agenda as they were when they all slaved under serfdom.

Furthermore if a small business doesn’t have expenses to write the input credits off against, than it does the small business no good to have paid the HST and not be able to recover the payment. Sure they can bill it out from their surplus value, but can they recover it? Its an added cost.

Many small business start ups will have their hands tied behind their back because they don’t yet have the size to take advantage of input credits. For those small business this is a flat tax on their sales regardless if they are profitable or sinking in the red. It is regressive taxation that disadvantages any business below a level of profitability and blocks the door to new entrants.

HST is anti free enterprise where road blocks are put up against new entrants to the market place in the form of taxation before profitability that diminishes their competitive ability to compete with surplus value during the growth stage as opposed to the mature stage of the business life cycle.

I agree with many things you say above, Eagle, but not with the bit about ‘surplus value’. Business doesn’t ever have “expenses to write the HST off against”. HST, unlike PST, is never written off against anything, (except, perhaps, in the event of a bankruptcy where what had paid in HST couldn’t be recovered from HST collected on its sales.)

The HST is paid by a business on its expenses, and recovered by it through HST received on its sales. Accounting fees are subject to HST when accounting is provided by an independent accounting firm.

What the business pays in HST is recovered from what it charges in HST on its sales.

The BC customer, the final retail consumer of the goods or services provided by the business is always the ultimate payer of the HST, not the business. So there is fundamentally no difference so far as whether accounting is done ‘in house’ sans HST or contracted out with HST.

In one case the business doesn’t pay it, in the other it pays it and gets it back. Either way it equates to zero for the business unless it has no sales, and in that case it’s no longer in business.

You seem to forget that HST was not voted IN by ANY margin provincially, LUMBER1. It was imposed by a backroom deal between Campbell’s government and Ottawa.

Where a minority Federal government had to secure support from the separatist Bloc Quebecois to get the enabling legislation through Parliament.

Support that was only given because witholding it could’ve triggered a Federal election which the BQ did not want at that time.

“The People” of BC certainly did speak LOUDLY over the ensuing months, and accomplished something that the Campbell mob thought impossible, in spite of all the obstacles it could throw in our path.

If having a HST had been truly a good ‘end’, it should have been capable of being brought in by good ‘means’. It failed miserably on both counts.

Actually, Eagle, even in the case of a bankruptcy HST would be recovered by the business. In any period where there are more Input Tax Credits (HST paid by the business on its expenses) than there was HST collected on sales made by the business, the government refunds the difference.