On page 14 of the 2008 Statement of Financial Information for the City of Prince George it says the City had
948 employees and they had a total gross pay of $44,832,807

On page 14 of the 2009 Statement of Financial Information for the City of Prince George it says the City had
924 employees and they had a total gross pay of $47,525,070

In 2009 the City had 24 fewer employees than they had in 2008, however the total gross pay for the city workers went up by $2,692,263 (from 2008 to 2009)

Another way of putting it is, in 2009 the City had 24 fewer employees than they had in 2008, but the total gross pay the City paid its workers went up (from 2008 to 2009) by 6.0%

http://www.city.pg.bc.ca/city_services/finance/statements

(Thanks again Gus for digging up that link)

How can our local MLA, Bell get richer while his workers get poorer if they raise the minimum wage?

Pay for MLAs should be linked to a reasonable multiple of the minimum wage.
This might hit the pocketbooks of some people who own fast food joints while moonlighting in the Legislature, but I have few tears for them.

You should see jobs at fast food restaurants as a learning experience. Kids working there don't support families, they only support themselves by getting some pocket money. That's great, I don't see anything wrong with it, it keeps them off the street and out of trouble.
Many successful people started out flipping hamburgers.

Minimum wage, isn't that the very low amount of pay our gov't says the corporation/business must pay employees by law? Of course it is. What makes anyone think it would ever be raised to be a fair exchange between employee and employer for the services provided? While the LIEBRALS are in power. Although they are not alone here, the LIEBRALS are the worst party to come along in some time whose main objectives are dedicated to inflating the bank accounts of business. Can you say HST? Be sure to remember all the BS and other LIEBRAL scandals over the years when recall starts! Lets show these $#$%&^&^#@ we mean business!!!

HD, what burger joint do you own?

Interesting point acrider54!
The reality is, Bell is not supposed to have anything to do with the operation of his business while sitting as an MLA.
I believe it is supposed to held in (blind)trust, and he is not supposed to have anything to do with the day to day operations and the decision making process.
The reason for this is that politicans are in daily contact with information and situations that their businesses could in fact,benefit from.
(kinda like Paul Martin and his shipping business, ya know?)
And Bell is not the only one in this enviable position, I am sure!
Of course,our Liberal politicians would never use anything to the advantage of their businesses or themselves...would they?
We used to hear more about this at one time,but it seems to be a forgotten issue in todays political scene.
Politicians on all levels are privy to a lot of information that they could use to their personal and financial advantage,but I am sure they would never do that.
By the way...do you know anyone who would like to buy the Granville Street bridge?
I am selling it for great price!

What good does it do to raise the minimum wage if the cost of the increase merely flows through into prices? This is of no real benefit to anyone ~ all we're doing is working with bigger figures ~ the overall actual purchasing power of the increase is negated by the overall rise in prices that will, of necessity, surely follow.

What the BC Fed, and all of us, for that matter, should be trying to do is to INCREASE the purchasing power of every dollar in terms of what it'll BUY in goods and services. Not erode it further, which is what'll happen with a raise in minimum wage, or any general wage increase. The only benefit of which ~ and it's a spurious benefit at that ~ is to enable everyone to get further into debt than they already are.

Celebrating Labour Day with this government in power is laughable.They have not one ounce of respect for the lowly workers of our province.Not only do they keep the minimum wage low for the minions,but try taking on Worksafe BC,since the liberals came to power and made changes in 2002.You can go into your hearings with Worksafe BC or there higher tribunals,with a boat load of irrefutable evidence,and still lose,and you walk away thinking,what the hell just happened.So Iam finally getting some satisfaction out of watching Gordon Campbell suffocating in a mountain of shit that he created,and I normally wouldn,t say this towards another human being,but I hope you are enjoying the same personal hell you have inflicted on so many people.

Charles ... the info is a one year interval comparison of an unaudited report.

Sometimes one does not compare apples to apples in that situation.

I have looked at the audited figures from 2000 and compared those to the audited 2008 financial report.

Here is the consolidated total for expenditures with 2008 first, then 2000, then the % change.
labour & benefits $48,613,000 $35,867,000 35.5%

So that is quite a different picture, even a different figure for 2008

Here are the other line items:

materials & supplies $4,403,000 $3,021,000 45.7%
city fleet expense $2,437,000 $1,134,000 114.9%
contracted services $18,746,000 $6,285,000 198.3%
electricity & natural gas $3,637,000 $3,076,000 18.2%
rcmp contract $13,935,000 $9,652,000 44.4%
professional services + insurance $1,047,000 $898,000 16.6%
grants $1,214,000 $760,000 59.7%
misc $4,680,000 $2,209,000 111.9%
debt interest & fiscal services $7,875,000 $8,140,000 -3.3%
capital assets incl work in progress $22,197,000 $9,971,000 122.6%
PG public library $3,581,000 $2,661,000 34.6%
parking commission $0 $696,000 -100.0%
pg development corp (2001, zero in 2000) $2,506,000 $460,000 444.8%

total $134,871,000 $84,830,000 59.0%

Over the 9 year period there was a 35.5% increase in labour and benefits for ALL employees on the city payroll.

At the same time there was a 3 fold increase in contracted services. They are now just under 40% of payroll when they used to be less than 20% of payroll.

Also, user fees have been increased so that they now constitutes a considerably higher percentage of the tax on residents.

property taxes $68,515,000 $45,161,000 51.7%

garbage $3,520,000 $2,149,000 63.8%
water + sewer $11,385,000 $143,000 7861.5%

transportation services $3,165,000 $1,376,000 130.0%

Other sales of service to public $11,590,000 $7,697,000 50.6%

At the same time, collection for regional and provincial services by the city have been relatively low

school taxes $29,221,000 $27,519,000 6.2%
hospital $3,600,000 $2,619,000 37.5%
RDFFG $5,527,000 $4,312,000 28.2%

From the linked site below:

In BC only 2.2% of workers earn minimum wage.

What it does not say is how many earned less than the minimum wage. There are a lot of exempt workers under the Act.

In addition, what is the comparison to other provinces. In fact, the most important question is what is the percentage of people earning minimum wage.

Alberta is the lowest with 1.4%, Ontario is the highest with 8.6%.

In which province would you prefer to enter into the work force? The one with the highest minimum wage, or the one with the lowest number earning minimum wage.

http://employment.alberta.ca/documents/LMI/LMI-WSI-minwageprofile.pdf

From the CANADIAN RESTAURANT AND FOODSERVICES ASSOCIATION re the Ontario increase in minimum wage.

http://www.newswire.ca/en/releases/archive/March2010/31/c6612.html

Their suggestion is to "Freeze the liquor server and student minimum wage differentials, recognizing the significant extra income earned by liquor servers and holding wages for students at 2009 levels."

So, while people may be on a minimum wage, not all people on a minimum wage have the same take-home pay. In fact, some of them can make a decent income if they are in an industry where gratuities are the standard. 10% on average to take care of those who do not tip as well as those who tip 15 to 20% on occasion.

In the USA, federal law allows those employers whose workers are in a job where gratuities are standard to reduce the direct wage to just over $2.00 per hour.

The new HST tax is the biggest attack on labor in BC history. No surprise that the ndp backs this from the perspective of more money for public sector workers.

Under the PST most services were exempt. A service is essentially a labor intensive operation. Under HST services are now taxed at an extra 7% and these labor costs are in no way considered an HST input credit.

Therefore HST represents a 7% flat tax on the gross cost of employees including all the matching taxes such as EI, and CPP, and income taxes that the employer already pays, they are taxed the 7% on the total cost of the employee.

Some say how is that... while if a business has to charge the 7% on there final end product and that end product is essentially made up of a large portion of labor, then any portion of the end product made up of labor is taxed at 7%....

Its an end run around the income tax (and a tax on the income tax) where they don't have to deal with basic exemptions and a progressive tax system that tax an appropriate progressive amount based on earnings levels... the end run takes it from the employer so the employee never sees the tax in the first place. It disproportionately hurts the low income earner the most.

Any business has a small gap of value between what their total costs are and what their actual ability to receive for their end product is. This is a finite value gap that has to include any new value added taxes, shareholder profits, and potential for employee raises... if you allocate more to one stakeholder then you have to take away from the other if your revenue demands are not elastic and you can not simply increase your price to accommodate.

So in effect a small business that makes its money off of the value creation of labor is now at a 7% disadvantage on a slim value gap that all but rules out any increase in employee wages... especially minimum wages as the company now has to figure out how to absorb the new 7% tax on its employees total costs.

In effect the HST is a new tax on labor in the province of BC. That is the primary difference between HST and PST. It means any business involving labor is now at a 7% disadvantage over a similar business operating in Alberta... be it knowledge based, engineering, fast food restaurants, consulting, legal, medical, small business, industrial trades, you name it and BC is now at a 7% disadvantage when it comes to employing people as opposed to doing the same business in Alberta or anywhere else in the world for that matter that isn't also taxing employment by 7% of the gross cost of that employee.

For the globalists this is great. This is exactly what they have asked Gordon Campbell to do at their secret Bildergburg meetings. It gives them input credits on their foreign made products, input credits on their automation that replaces Canadian employers (automation isn't subject to HST), and it creates a greater advantage to employing people overseas as opposed to domestically in BC.

And some people say this is all good for business in BC... obviously people and business that doesn't plan to employ very many people for their revenue. In effect it is much more than merely a transfer of taxation from corporations to the middle working class of the province... it is a fundamental shift in our economic competitiveness to employ workers in British Columbia as opposed to off shore or Alberta.

The economists the BC liberals would not like you to hear from recognize this and say it will cause a decrease in our provincial GDP for five years... recognizing that when you tax total cost of employment by 7% it has a direct impact on our ability for companies to have profits and compete, and for our employees to attain raises. They say any benefits will be past 5-7 years out, which is to say if there are benefits at all in theory they will be a long time coming... what they are in effect saying is that in 5-7 years they hope the new costs will be absorbed in diminished increase to wages over that time thereby nutralizing the effect on business, but in the end it still comes out of the pockets of everyday working people in this province as we lose business competitiveness in employing people and the reduced economic activity as a result... to say nothing of the lower earning power.

The HST was the biggest attack in BC history on the working people of this province and it was done through electoral fraud that should see people going to jail... to say nothing of the long term negative economic impacts it will have on our employee based economy going forward.

Raise the min wage. By not raising it just shows how petty B.C is. Even family that was here this summer said the wage is to high and the taxes for staying in the province while visiting is also to high.

the wage is to low sorry

Gus. The 2008 and 2009 Statements of Financial Information for the City of Prince George (where I got my information from) both have the following written at the very top of them:

"The undersigned, as authorized by the Financial Information Regulation, Schedule 1, subsection 9(2), approves all the statements and schedules included in this Statement of Financial Information, produced under the Financial Information Act."

Directly under this quote on these two Financial Statements are the names and signatures of the Mayor and the Director of Corporate Services (for the City of Prince George).

The date these signatures were made on the 2008 Statement of Financial Information for the City of Prince George was June 16, 2009. This date is a full 5 1/2 months after the year 2008 ended.

The date these signatures were made on the 2009 Statement of Financial Information for the City of Prince George was June 29, 2010. This date is a full 6 months after the year 2009 ended.

Put it up to $20 an hour. Would that be 'enough'? Or maybe we should make it
$ 30. Can you not get it through your head that ALL costs ~ and labour wages and salaries, at whatever rate they're paid, are COSTS ~ flow through into, and have to be recovered, from prices? If wages and other costs rise, prices will rise, too.

Those who believe that simply raising the minimum wage is somehow going to induce some kind of new-found prosperity amongst the working poor are dreaming in technicolour.

That could only happen if prices didn't rise in concert, and take back all the increase in wages. We should have, and could easily have, a mechanism to make that happen. But we don't, and we won't ~ because too many people on both sides of the issue are not willing to ever look at the complete picture of how an economy works.

So they imagine that an increase in minimum wage will be the great cure-all. Without realising this is the same kind of thinking that posits an Olympic Games, or a Site C hydro dam, or even a good war ~ all things which distribute incomes years before they produce anything that the general public receiving those wages will be asked to pay for, are the tickets to prosperity. They are means towards inducing nothing more than pure inflation, and there's no long term real benefit from that to anyone.

Prosperity is when your standard of living is increasing FASTER than your COST of living. We do have, in general, a rising standard of living in BC. But it isn't rising faster than our COST of living is. If it we're, we wouldn't be seeing the kind of increase in overall debt levels, both public and private, we're witnessing now.

Charles ... I realize that.

The statements you refer to are unaudited by an external auditor and are produced for a different purpose than year end financials.

If one wanted to go back several years, those statements are not available more than for a 3 year or so period because they address a new reporting requirement to senior government.

The year end financials I refer to are audited, are relatively consistent in the methodology, and are available for a long period into the past.

That means annual anomalies, such as payouts at the end of a person's employment with the city are averaged over longer time periods than just one year, thus have a more consistent impact on the total payroll and benefits figure.

The gross figure in your quoted report for 2008 is $44,832,807. The full annual report shows $48,613,000.

Be my guest and g

computer acting up again. :-(

Be my guest and go for the lower figure if you wish.

The people who want to raise the minimum wage are the first one to yep like hell when they have to pay more for their junk food at fast food outlets.

It never fails!

And yes, you can bitch about the Liberals, but don't forget all the bloody NDP scandals we experienced.
How soon people forget. lol.

Palopu ... many of your other statements can be refuted. There is one, however, which stands out for its simplicity and irrefutability: “in the end it still comes out of the pockets of everyday working people in this province.”

Of course the phrase “everyday working people” is somewhat loaded since there are other people with various types of incomes who also contribute and do so in relatively large amounts of the total. But we need not go there for this purpose.

As socredible so often states, you change one side and it affects all other sides. You want to raise not only the actual income of the low wage earner. What I think you and others, and that includes me, want to do is raise the relative income of low wage earners. Unless we deal with the relative income differential, or the widening “wage gap” which the whole western world is talking about, the whole exercise is totally useless other than for short term benefits which will erode very quickly as costs rise and as others’ wages and salaries rise.

The increasing “wage gap” is also very much based on gender, age, race, education, industry, and country. So, one size does not fit all when looking for a solution.

I would suggest we take a look at countries like Iceland, Finland, Italy, Norway, Sweden, and Germany to a large extent, in that the minimum wages are the same as those negotiated in the bargaining units and are applied to all working in those sectors even though they may not be unionized employees.

I would like to see the faces of union leaders at that suggestion.

The HST made a major shift in taxation. Maybe it is time to stir the pot a bit more.

BTW, the minimum wage in Canada is roughly 44% of the per capita GDP.
There are 17 countries (the poorer countries) whose minimum wage is higher than 100% of the per capita GDP.
There are 62 additional countries whose minimum wage is a higher percentage of per capita GDP than Canada
There are 70 countries whose minimum wage is an equal or lower percentage of per capita GDP than Canada
There are 10 countries who do not have minimum wage laws

BTW, those countries without minimum wage laws include the above named countries that use collective bargaining as their tool rather than legislation: Iceland, Finland, Italy, Norway, Sweden, and Germany.

Say why not vote the Greens in. I know I know they aren't strong enough. Reason for that is nobody votes. But wouldn't give a new vision?

Eagleone, what are you talking about? Your post makes no sense to me whatsover. Here are two scenerios:

Scenerio One - Old System:

I operate a small law firm (heavily reliant on labour). I pay my team of lawyers 200K a year for salaries. I bill out 500K to my customers and for simplicity sake, let's say I spent another 100K on stuff that I paid GST on. At the end of the year, my net income would be 200K (500-200-100) and I'd owe the government 20K (25K GST collected - 5K GST paid). Notice that I didn't pay HST on the salaries so I don't get it as as credit to offset what I owe for GST.

Scenerio Two - New System

Assuming the same variables, the only difference is that I now collect 60K in HST (12% instead of 5%) and I now pay out 12K in HST, leaving me with a debt to the government of 48K instead of the 20K under the old system. The additional 28K is simply reflective of the rate increase (7%) on the net amount that is taxable (500K-100K). My net income is still the same as in scenerio one, since taxes collected or received are not revenues or expenses.

The additional HST paid back to the government IS NOT paid for by me (the business owner) in scenerio two, it's paid for by MY CUSTOMERS through what I bill to them. If my customer was another business, they could claim the HST back as a credit when they do their filing. If they are not, it simply comes out of their pocket. So while the HST does increase costs for consumers, it doesn't increase costs for business.

There are also instances where PST previously paid by a business (and not recoverable) would now be replaced with HST (which is recoverabe). This is why, as most people have correctly commented, it is a tax shift from business to consumers.

Maybe I misunderstood your post?

Gus. The figure of $44,832,807 in the 2008 Statement of Financial Information is called gross pay.

The figure of $48,613,000 in the 2008 Annual Report is called Labour & Benefits

The following is copied and pasted from page 75 of the 2008 Annual Report

"The City of Prince George and its employees contribute to the Municipal Pension Plan (Plan), a jointly trusteed pension plan."

"The City of Prince George paid $3,572,193 and the Prince George Public Library paid $144,296 for employer contributions to the plan in fiscal 2008."

I believe the above explains the overwhelming majority of the difference in figures between the 2008 Statement of Financial Information and the 2008 Annual Report. (I think the pension plan payment by the City is classified as a benefit.)

Also I see the increase in total labour & benefit expenses for the City of Prince George (according to the 2008 Annual Report) from 2007 to 2008 was 4.8%. (2007 - $46,375,000 and 2008 - $48,613,000)

I think what we'd all really like to do, Gus, is raise the 'purchasing power' of all incomes.

To make each dollar we receive in income actually BUY MORE in terms of the goods and services we all need and desire.

To do that we have to alter, to the credit of all of us as Consumers, the way prices, taken collectively, are determined and charged TO US AS CONSUMERS.

Accounting, as it's presently practised, accurately determines prices from the standpoint of individual businesses ~ and by extension, all businesses, taken collectively. All costs, plus profit, are included in price.

But accounting does not currently relate to the ability of Consumers, again taken collectively, to meet those prices from the incomes distributed and still available to them as 'money'. There's your real "gap" ~ and it grows ever wider.

This is a relatively easy flaw to correct.

If it were corrected, I doubt we'd be concerning ourselves with trying to do the impossible (again) in regards to the minimum wage by the same way that's been tried so many times before to such fleeting benefit, if any at all.

So you guys are saying leave the wage where it is then or what. Whats the answer. Is there one or shaw we just say to heck with it hmm?

shaw lol I meant shall

I used to make minimum wage - then I got a clue and went back to school. No more minimum wage. For some reason, it never occurred to me to whine to politicians to raise my wage.

I think you have found the difference between the two, Charles. Thanks for that.

"This is a relatively easy flaw to correct."

Two simple questions:

1. Which country has corrected it and has shown that it works effectively for at least 10 years for the improvement of its citizens' purchasing power?

2. How did they do it?

There is an answer, Chris. But it won't be found in simply raising the minimum wage. That's a cruel hoax by those who know better, or should. And we should really be worried if they're seeking office politically and they don't know better!. That would be just as bad as the other side trying to get us to believe the HST is somehow going to be good for us.

Any such raise in the minimum wage will just flow through into prices, raising them, too. This certainly doesn't do the recipients of the increase any good, or any of the rest of us either ~ for the rise in the cost of living will then have just negated the pay raise of minimum wage earners, or further cut into the disposable incomes of the rest of us.

All the minimum wage earners will be doing is working with larger figures. Those that remain employed, that is. For some employers will likely not be able to pass on the increase, and their ability to continue in business and still have employees will be thereby jeapordised.

The answer will be found in the way prices to CONSUMERS ~ all of us, because we're ALL Consumers ~ are set.

So far as each individual business is concerned, the way they are currently set is 'financially' correct. They represent what the business has to receive back in price for all the costs it's incurred, plus enough of an inducement in the form of profit to make it worthwhile remaining in business.

But to all of us, as Consumers, or would-be Consumers, of what is actually available on the market as 'production', the way modern prices are determined 'financially' leaves us continually collectively short in the adequacy of our incomes to fully liquidate them.

There has to be a further distribution of income to us that has NOT been costed into the production we're trying to consume.

This could easily be done by having a price rebate that would effectively lower the price of all goods and services to Consumers, paid out of new credit created by the Bank of Canada, and made available to Consumers at, or after, the time of sale.

No taxation or inflation would be involved in this, it would simply be a way that prices, and incomes necessary to fully liquidate them over each and every same chosen period of production, could be kept equated.

It would raise the purchasing power of every dollar received as income, without increasing, and in fact, decreasing, prices to Consumers (but without Canadian manufacturers and merchants taking any loss whatsoever).

Regional differences in "purchasing power".

We know that to be true in Canada. Here is a developing example from the Czech Republic.

http://www.radio.cz/cz/clanek/70589

Social (education and other personal capacity criteria) strata differences influence on "purchasing power".

This one is from New York, but is true in Canada as well.

http://forums.techguy.org/civilized-debate/441665-gap-between-rich-poor-growing.html

People keep saying if minimum wage goes up, the cost of goods and services will go up to eat up the difference.

I'd like to see some proof of that. Do any fast food franchises charge more than BC does in provinces which pay higher minimum wage?

If only 2.2% of workers in BC earn minimum wage, and if their wages go up then it will mean we would have to pay more, do you know what this means? It means that EVERY OTHER PERSON in BC relies on those working poor 2.2% to set the cost of merchandise. OH MY GOD!

The purchasing power of a unit of currency is one thing.

The purchasing power of a unit of labour (one hour, one week, one month, one year) is a totally different matter. In my opinion, THAT is the most important change over the decades that the people on the wrong side of the dividing line experience.

The presence of a quantum increase in the bombardment of products that induce wants in those who cannot afford to access them is no help in diminishing the perceived erosion of "purchasing power" compared to the actual erosion of that "purchasing power".

Those in larger communities grew up with TV channels that were picked up for free over the air waves. Most now pay some monthly fee from $30 or so to $100+ to pick up a hundred plus stations.

Too many things to purchase. The choice is overwhelming and almost none of us can have them all. No wonder people are more and more frustrated with all those carrots dangling out there!!!

"Two simple questions:

1. Which country has corrected it and has shown that it works effectively for at least 10 years for the improvement of its citizens' purchasing power?

2. How did they do it?"
------------------------------------------
None, Gus. Though there have been limited variants in a number of countries that were successful, until international 'pressure' was brought to bear on them to discontinue.

Perhaps the best example was Austria immediately after the close of World War One. The Austro-Hungarian Empire collapsed in 1919 as a result of that war, with all its component parts going off as independent entities.

The new government of immediate post-war Austria introduced a form of national "price compensation" that very quickly brought a genuine 'prosperity' to the citizens of that new republic.

They were not "allowed" to continue with it, however, and while the Austrian government's books were 'balanced' in the othodox sense after it yielded to foreign financial pressure, the Austrian people themselves found no advantages from their government's return to what was acceptable to international finance. Small wonder they welcomed Hitler's take-over, and union with Nazi Germany a little over a decade later.

Australia had a somewhat similar, but as I understand, more limited scheme in place after World War Two. It applied to foodstuffs, and lowered the price to the Consumer. I believe it was funded through some form of taxation, however, which need not be the case at all, so long as the country always has an ability to actually produce in excess of what it can consume.

Since then, we've universally followed the orthodox prescription of ignoring one side of the equation in the belief that altering the other side can be done with impunity. It can't be. Stimulus spending, raises to minimum wages, and such like, are always easy sells to the gullible public. Those promoting these things are simly digging a deeper hole for us all, one that we're going to find ourselves struggling all the harder to get out of, and to no avail.

If Obama, instead of proposing $ 50 billion in new stimulus spending on infrastructure, proposed the same amount be applied to lowering consumer prices to Americans instead, the US recession would be over as fast as the rebates started being paid. Without inflation, and with a re-employment of far more Americans than'll ever find jobs building eventual infrastructure. Their taxes would more than fund that.

NMG, your scenario is correct. It does not invalidate my presentation though.

The key here is value gap and not net income. Your argument is based from a net income perspective which is the fault I'm sure the Chamber of Commerce also makes.

From a net income perspective its easy to miss the danger in the HST. It easy to assume this additional cost is simply collected by the business from the customer to pass along to government at no cost to the net income of the business. If so then you have exceptional value gap and were leaving a lot on the table, or on the other hand you have a captive clientele that will just be made to pay the tax.

The Value gap however is very different from the net income. All business differentiates on Value where as one law firm may charge less for their services, but is the Value really there... and if you are going to possibly go to jail and another law firm charges more but gets you free, then that firm has a different Value to the client... and in both cases they may have the same Costs... possibly even charge the same Price and thus have the same net income... but one clearly has a Value gap larger than the other if one gets results and the other does not. A prudent management accountant uses this for strategy in Pricing.

A Value gap equation consist of the Cost of a service, the Price for the service (revenue), and the Value of the service to the client.

The Price minus the Cost is your net income (P-C), but not necessarily your Value gap.

Your Value gap is your Value minus your Price (V-P). One can increase their Value gap buy finding Cost reductions, or creating more Value with existing Costs while charging the client the same Price.

The value gap is often the satisfaction a customer feels when they got a good deal. Maybe you could have charged more and eaten up some of that value gap, or maybe you are already so close to that Value in your Pricing that no gap exists.

Most small businesses that employ the overwhelming amount of employees in this country try to maximize their share of the Value in their Pricing... not out of greed, but rather out of necessity to stay in business due to strong competition on the Cost side of things.

If a business has Value Gap sitting on the table for the customer and they can simply transfer the cost of the HST to the client then HST isn't that big a deal for them you are correct.

But the vast majority of small business operate near the Value they can Price to. If you add 7% to their gross Pricing then this has to come from the value gap and if the Value is not there for the Price increase, then they go out of business or are forced to curtail future raises, and maybe cut back on employee costs all together.

I noticed that I have no one willing to argue that #1 an employee cost is not an input credit and therefore HST is in effect an 7% flat tax on the cost of employees. Whether or not the employer pays for it out of reduced net income, or the client pays for it out of reduced value. #2 that as a flat tax on employees it will have a disproportionate effect on the lower income marginally profitable small service oriented business.

If a business has its value gap eaten up in a new tax, then a there is no value left to pay for future raises of any kind no matter what the income level of the employee.

Furthermore to NMG's argument. If he charges (pricing) $500,000 in revenue for his law firm and expenses $300,000 ($100,000 of which is non employee input credits) and thus has a net income of $200,000... then consider this:

Under HST the HST to be remitted to government is $48,000 ($28,000 greater than just the GST).

So if one looks at it from the perspective that you have no Value gap already and you can not simply pass this Cost on to your client because you run an excellent law firm... then this $48,000 is in effect your responsibility as it diminishes the real value.

$48,000 out of your net income of $200,000 can easily be the equivalent of a 24% tax on your business net income.

If the government simply came along and was honest and said we would like to charge small business 24% on their net income above and beyond their existing income tax... then I wonder would the Chamber of Commerce still be willing to go to court to fight for this tax?

Now say your $500,000 in revenue had $400,000 in costs of which $100,000 were none employee input credits... suddenly now you have a tax liability equivalent to 48% tax on your net income from a 12% HST.

Now lets say your $500,000 in revenue had $450,000 in costs of which $100,000 were none employee input credits... suddenly now you have a tax liability equivalent to 96% tax on your net income (not the advertised 12% HST). You have $2000 profits left, but you still have an income tax on $50,000 net income, so you are in effect into the red even though you should have had $50,000 in profits.

HST hits you on your gross income and not your net. HST gives you no input credit for your employee costs.

What if you just break even on a normal year prior to HST? Now you are no longer solvent under HST.

GST is just as evil to employee based business for the very same reason. Its why PST was exempt from services to begin with and why previously that 7% only applied to 'goods' and not services.

A goods based industry has a serious advantage over a service business in input credits in this regard under the HST system.

Socred your argument is complete invalid in the real world. Theories in a static theory land don't apply to the real world where we do in fact have existing inflation beyond the control of stakeholders to your argument. Gus is much more close to reality in his argument of relativity in purchasing power.

What you are in effect arguing for is for minimum wage earners to pay the full cost of the fiscal child abuse that is monetary inflation on the erroneous argument that if they hold the line paying the inflation tax, that it will pull all the big players into line for a balanced accounting system.

For your argument to be anything but an insult to hard working people earning minimum or low end wage you would first have to realize your accounting utopia from the top down, because the bottom up process for reform is simply not practical even if it was ethical.

You can not mix monetary policy with minimum wage policy. They are completely separate... one being the value of money in the global sense, and the other being the value of a business model with independent value creation.

Also your idea of $50 Billion used to reduce prices is akin to a $50 Billion dollar hand out to someone higher up the food chain. Its the argument that if you feed a goat enough oats some will make it through to the road for the little people... of course the guys with the goats will argue its good policy and all we need is more oats for the goats.

Eagle, tell me what you think the minimum wage should be. $ 10 an hour, like the BC Fed and others have suggested? More than that? Tell me how raising the minimum wage, or any wage for that matter, can be done without the increased cost flowing through into prices? Is not the "value of money" found in what it will actually BUY?

I can easily see how raising wages wouldn't have an adverse effect on prices to the Consumer if there was an increase in productivity accompanying the wage increase, AND THAT INCREASED PRODUCTIVITY COULD ALL BE SOLD.

But I don't think we're going to witness Hamburger Patty's Wendy's produce and sell THAT many more burgers to cover a $ 2 an hour wage increase to all his employees. His prices, and the prices of most others employing people at minimum wage will have to rise. So where is the real advantage to "those hard working people earning minimum wage"? The ones whom I'm supposed to be insulting by making a suggestion that would LOWER prices to them, and everyone else, without touching the wage they're making?

You seem to be hung up on the notion that someone "higher up in the food chain" would make a greater profit from such a scheme. Hopefully, that's exactly what would happen.

Their greater profit isn't coming at the further expense of Consumers, though, and that's what you're overlooking.

Consumers are getting goods and services at a REDUCED PRICE, while economic activity is increased due to increased REAL Consumer Demand being made more fully an Effective Demand FINANCIALLY.

You have to look at the "big picture", Eagle, and not get hung up on worrying about some of the EFFECTS of a currently failing financial system that seem to trouble you so. Correct the CAUSE, which is fundamentally that our current financial system is NOT fully 'self-liquidating' in each and every succesive cycle of production/consumption, (and can only be kept functioning at present by ever increasing issues of unrepayable debt). This is neither sustainable, sensible, nor in any real sense of the word, beneficial to anyone.

socredible,

Ontario has the highest minimum wage in Canada. One of the reasons the HST was brought into BC was to stay "competitive" with provinces like Ontario. It's funny how the province with the lowest minimum wage is suddenly worried about staying competitive with the province that has the highest.

Every McDonalds I've been to charges about the same across Canada. Here's the secret, companies can and do allow costs to creep into their bottom line to stay competitive. It is an accepted part of doing business. (I almost said free market, but huge government bailouts of private business proves otherwise).

I don't mind if businesses paying the lowest minimum wage in the country in the province with the highest cost of living have to up their wages a bit so some poor bastard working for minimum wage can afford a new pair of shoes once in a while.

The "trickle up" theory that 2.2% of the workforce earning minimum wage will cause the cost of everything to go up if they get a small cost of living increase is laughable. Reaganomics doesn't work! Business do not reinvest excess profit, they never have and never will. The only thing which matters are sales and profit coming in, people do not matter to business unless they get right up in their face and start demanding being treated like human beings. If it weren't for labour laws, we would be working in indentured servitude. Just look how workers here illegally are treated.

Sounds like most people should just work for less the min wage and be slaves. That might make people happy eh. Why own a business to pay slave wages.

Pojeb, just taking an increase in the minimum wage itself for the 2.2% that are making that little, I'd tend to agree with you. But when you move up the minimum wage, those making just slightly more than that naturally feel they're entitled to an increase, too.

The guy currently making
$ 10 an hour, who's worked his way up from Campbell's 'training wage', to minimum wage, and now to $ 10, isn't going to be overjoyed at the thought that those who are at a level he was once at have suddenly caught up with him.

He's going to push for a pay increase, too. And that's where these additional costs can't be absorbed in the business, they have to be passed on. Once that starts, we're back on the same old inflationary treadmill we've been on so many times before.

And no matter how fast the increases in wages are granted, the rate that prices advance will invariably be faster.