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Renovation Industry Could Take A Punch From HST

By 250 News

Monday, August 17, 2009 03:58 AM

Prince George, B.C. - A report prepared for the Canadian Home Builders Association indicates the harmonizing of the provincial sales tax and GST, will have a serious negative impact on the home renovation industry.
 
The report prepared by Altus Group Economic Consulting, notes the Harmonized Sales Tax (HST) will increase the effective tax rate on contractor renovations in B.C. by 7%. When the B.C. increase is coupled with the proposed HST in Ontario, the report concludes the tax burden on homeowners and rental housing investors will increase by close to one billion dollars a year.
 
Although the B.C. Government says the switch to a harmonized tax will save money in the long run, the report suggests the only way to achieve tax neutrality in this province is to reduce the provincial portion of the tax on contractor renovations to 2.3%.
 
The report also observes that unless this action is taken, there will be a number of negative effects,including:
• Reduction in renovation activity, which will affect the economy and employment;
• Shifting contractor renovation activity into the underground economy;
• Undermining government policies and programs to promote housing affordability and choice, and
 environmental objectives; and
• Reducing the quality and maintenance of the existing housing stock
 
The B.C. Government plans  to move to a Harmonized Sales Tax effective July 1 of 2010.

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Comments

to me, all HST, is the provincial government looking into getting into the value added taxation formula. Thus increase tax revenue.

Yes it will cost the citizen money, if you add 7% to 5% for 12%. If they show up with a 10%HST, it will be a bit more pallatable.
Finally someone who has had a closer look at the situation. They have reached the conclusion that I have thought would be an obvious conclusion. I doubt the government of Ontario would provide rebates over a three year adjustmnet period if such a finding would not be relatively accurate.

Hansen was quoted in the papers several weeks ago that BC would not be providing rebates to the general population as Ontario will be doing. They are going to be putting the Federal money into their budget to cover part of the deficit.

Why can politicians not be honest? Too many promise and do not deliver.
You'd still be paying 10% on a whole host of goods and services that we're now only paying 5% on, he spoke. If a would-be home builder clears his lot of merchantable timber and has those trees custom sawn into lumber, the clearing, transporting and sawing costs would be taxed at 10% (12% now) HST, not just the 5% GST as at present. As would the sale of firewood from the waste slabs and edgings, as would the sawdust, if it were being sold for cattle bedding, etc. Even if he got a portable mill in and then hired someone to truck the waste away he'd be paying 10% (12%), double what he's paying at present.

And those are just a few examples. The builder, if he's a contractor, will be charging 10%(12%) HST on his 'labour', as well as on the materials used, against 5% on the 'labour' now Federally, and nothing Provincially.

Where there is a saving to business is that the BC 7% tax on the capital costs of equipment purchased will be able to be recovered as an Input Tax Credit with the HST. Also any maintenance costs would be ITCs. In the first instance it would be 7% less that has to be recovered from the public through depreciation charges costed into prices over the life of the asset acquired.

I think it quite safe to say that any of this 'saving' will NOT be passed on. Most of our small businesses need the money, and as for our large, export oriented ones, particularly in the forest industry, this will just allow them to further glut already glutted markets and run the risk of further countervailing actions initiated by their US competitors.

BC Rail, missing e-mails, read my lips deficit, health funding cutbacks, carbon tax, and now the HST.
Gordo and group have got to go. Even though a recall campaign can only begin after the HST is in place it is in the best interests of the citizens of BC to turf the Liberals from power before there are more lies and deception from this group of corrupt bandits.
the sooner the better.Lets stand up for ourselves for a change and let these politicians know that we will not tolerate the lying anymore.
and vote for who?
"we will not tolerate the lying anymore"

But that is the very nature of a politician. Politicans who do not "lie" do not get elected. Those who do get elected are experts at stretching the truth.

Quted from Ambrose Bierce's "Devil's Dictioanry"

Politician
n. An eel in the fundamental mud upon which the superstructure of organized society is reared. When we wriggles he mistakes the agitation of his tail for the trembling of the edifice. As compared with the statesman, he suffers the disadvantage of being alive.
Can anyone say "underground economy?" Time for an upsurge, methinks.
Socredible has it right. People havent got any idea as to how this HST will effect them. They can rest assured that it will cost them at least $1500.00 per year.

Can you afford a tax increase of $1500.00.

Since when can a Government put in a tax increase and not tell their Citizens how much money they will be collecting. This tax has to be stopped before it is implemented.

That means that for now people should continue to write to Campbell, Hansen, Bell, Bond, Rustad, etc; and let them know that the tax is unnacceptable. In addition people should continue to sign the available petitions. To do nothing, is to concede defeat.