HST a Boon to Mining

Wednesday, November 10, 2010 04:15 PM

Byng Giraud, Pierre Gratton and Bill Mracek talk about HST positives

Prince George, B.C.- It may be nearly a year before voters will be asked to go to the polls in a referendum on the HST, but the Smart Tax Alliance is rolling out its campaign to keep the tax in place.

Three key players in the mining industry, Byng Giraud of Imperial Metals, Pierre Gratton of the Mining Association of B.C. and Bill Mracek of Endako Mines, say the HST has made B.C. competitive, especially with the HST being introduced in Ontario.

Gratton says companies looking at investing will now see that B.C. and Ontario are on a level playing field as both have the HST.

Giraud says the HST has saved his company nearly $800 thousand dollars and that is money that will be put back into exploration and expansion. “The savings don’t go into someone’s pocket, they aren’t handed out as a dividend to share holders, those savings go right back into the ground so we can find new mines, or new deposits to keep existing mines running.”

Bill Mracek of Thompson Creek Mines, which recently bought out the Mt. Milligan project and is expanding the Endako operations, says the removal of the PST will mean about $8 million in cost savings. It will also mean about $14 million in savings for new construction at Mount Milligan. “More investment also means more work for local mining suppliers. Expansion at Endako mine alone is creating business for 115 suppliers, half of which are local, and about 400 new construction jobs.”

Pierre Gratton says he realizes the HST means people pay more at a restaurant, but in the long run, this harmonized tax is much better for the provincial economy. Giraud says the HST is providing savings that could help Imperial Metals extend the life of the Huckleberry mine past 2013 and without those cost savings, the mine’s long term viability could be in jeopardy.

Why is the group pushing the point now when the vote is nearly a year down the road? Not to worry, Gratton says simply “We’ll be back.”

The Smart Tax Alliance is a non partisan coalition of 31 B.C. business and industry groups formed to support the job creating benefits of the HST. The Alliance represents a cross section of industries with more than 800 thousand employees in the province. It has a special website, www.HSTjobs.ca

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Posted on Wednesday, November 10, 2010 04:15 PM in News by 250 News

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Comments

Posted by: onemansthoughts on November 10 2010 4:38 PM

Ok, so Ontario and B.C. are on the same playing field because both are collecting the HST. My point is why cant both provinces pay like 7 or 8 %? This would be a fair playing field, and fair to the consumer.

Posted by: Runner46 on November 10 2010 5:00 PM

revenues to the coffers of our business would be less.

Posted by: my2bits on November 10 2010 6:53 PM

It's not just that the consumers will be paying a litle more in the restuarants, he makes it sound pretty trivial.

All the money that the mining companies will be saving will be made up 100% by the people.

Posted by: socredible on November 10 2010 7:34 PM

Can't be much of a demand for minerals worldwide if margins are so tight it takes a tax shift like the HST to stay in business. Makes you wonder why there's so much pressure to get the Prosperity mine project, or any other new mines through if things are THAT bad.

Posted by: Chester on November 10 2010 7:47 PM

I don't want to criticize the benefits to business about the HST. I agree that they are very important and would benefit the companies and the province.

I do, however have a major issue with the Government dumping the additional tax burden onto the hard working taxpayers of our country. Enough already. We are not going to take it anymore. Don't you get it already? We are not going to sit back and allow you to take more money out of our pockets. Enough is enough.

Posted by: Palopu on November 10 2010 8:14 PM

These Companies and their Executives make hundreds of Millions in profits, shares, salaries, etc; For them to stand there and suggest that people on limited income, or earning $12.00 to $14.00 per hour should pay the bloody tax that they have been paying for years is a bunch of horse shit.

These are exporting Companies and any and all savings they get will go to shareholders, or salaries, bonus's or profits. They certainly will not be reflected in anything that is bought by the people of BC.

So they will get the savings from the production of thier product, and once the product is manufactured into a commodity in a foreign country and imported into Canada, and we go the Walmart and buy the item. Guess what??? We pay HST on the bloody item again. Companies will benefit from this tax for years and years to come, and consumers will pay it for years and years to come. $1.8 Billion per year.

This tax stinks to high heaven. The sooner we get it the hell out of BC the better. If these companies cant compete with all the deals they get in BC, then they may as well get the hell out of BC also and we will let the Chinese develop our resources.

Have a nice day.

Posted by: szd on November 10 2010 9:12 PM

Just you wait until they tell us that tax revenues are down because people are not drinking anymore. The liquor control board chair has said that right now liquor sales are down 40%. If that keeps up the government will be short 100's of millions more, hence Rich Coleman telling the police to cool it with the new impoundment rules. Very interesting times we live in!

Posted by: Palopu on November 10 2010 9:45 PM

Another fine example of the Liberals bringing in legislation thats sole purpose was to raise revenues. They use the impaired driving issue as an excuse to try and collect some big dollars in fines, and reduce prison costs by not charging people who are impaired.

The .08 limit with a roadside suspension without a fine was sufficient to control impaired drivers. Anyone over .08 should have been charged and faced the court system. There was no need to change this legislation except to try and generate more revenue.

szd is right. The Goverment will lose revenue because of this legislation, so will bars, and restaurants. This clearly shows that the Liberals do not understand the simple concept of ****For every action their is a reaction*** They as Government have a responsibility to look at the ramifications of their legislation on the people of the Province, and look and the pros and cons, and decide what is best for the majority of the people. Not to base legislation on the basis of how much money it will generate for the Goverment.

In any event as usual they got it all wrong, and are now in a worse situation than when they started. Same thing with the Carbon Tax, HST, etc;

Its time for them to take a long vacation.

Posted by: hammmy on November 10 2010 10:04 PM

They will say anything to keep the money in their own hands. Even at the expense of the tax payer.

Posted by: Born in BC on November 11 2010 4:16 AM

Uh the reason we cant pay like 7 or 8% instead of 13 or 14% is because money for services doesnt grow on trees.

Yes margins are that thin. That is the world we live in.

Decreased spending on alcohol is overall good for society and hard to critisize. It will mean less spending on policing and health care at least in the mid to long run.

Posted by: trucker16x on November 11 2010 8:32 AM

Hard to disagree with any of these comments other than to say we should vote out the tax next Sept. Not at all happy with the Liberals but am absolutely terrified to see Carol James and the rest of that gong show get anywhere near running our province.

Posted by: Resident on November 11 2010 8:45 AM

I would think a lot of the tax savings mining companies are enjoying will be going into the Liberal coffers to fight the next election.
Check out the price of copper. It is back to where it was before the recession. Copper is a world commodity and I am sure the price for nmd cable did not decrease at the wholesale level but in did in fact increased. So much for the HST lowering consumer costs.
An article like this just shows how much the mining industry is in bed with the Liberals. I can just imagine the crying from industry if the tax shift had been in the other direction and Joe citizen was given a tax holiday and industry had to pick up the tab.

Posted by: Andyfreeze on November 11 2010 8:50 AM

And no doubt they have had serious discussions with the Campbell government behind closed doors, on how to help out the Liberal propaganda campain we will now be bombarded with!
Nothing is ever as simple as it seems when it comes to this government or it's 'freinds'!
They get the goldmine...we get the shaft...nothing new there.

Posted by: socredible on November 11 2010 10:03 AM

Born in BC:- "Uh the reason we cant pay like 7 or 8% instead of 13 or 14% is because money for services doesnt grow on trees."
------------------------------------------

Right now the Fraser Institute, (would THEY lie to US?), calculates "Tax Freedom Day" at somewhere around the mid-point of the year.

So we contribute the first half of each year's earnings to pay for all the services that government provides us. And have the second half to secure for ourselves the basic necessities of food, clothing and shelter, plus any desirables. Many of which have also now become very necessary, and we've been persistantly 'encouraged' by government to have. For example, a vehicle to get to work in where no other mode of transport is available ~ and one, if you're in the Lower Mainland (and doubtless eventually all of BC), that can get through Air Care. Or it's off the road to be fixed, if it can be, or replaced. At WHOSE expense?

But in spite of the size of its take, the government still can't provide the services it's committed to, even at a level that's often been much reduced. Not without going further into debt.

And we all know that if we, with the second half of our yearly earnings, didn't also go further into debt collectively ~ if we ALL lived strictly "within our means", as the saying goes, (as if we ALL could ~ try 'saving up' for a house, or even a new car, nowadays!) ~ there would be a full scale Depression that would make the current downturn miniscule in comparison.

Just look how all the merchants and their suppliers wring their hands already at the prospect of an economic Armageddon at Christmas-time if consumer spending is off a bit!

Now WHY should this be? And if we are continually losing our ability to repay all this debt ~ which we must be, since over time it keeps getting larger at a faster rate than the economy is growing ~ how are we going to get ourselves out of this situation?

Posted by: gus on November 11 2010 10:25 AM

What are the mining companies forgetting to tell us? It seems to me that it follows along these lines:

1. resources are finite

2. exploration will occur where risks of not finding resources is lowest and development/production, if found, is lowest

3. development can only occur where resources have been found

4. initial development will occur in the jurisdiction where the resulting product is least costly to the primary consumer

5. multiple factors go into determining which jurisdiction will allow the least costly product to be produced, tax is only one of them

6. The ultimate consumer will be able to purchase the greatest number of products if the costs are lowest

7. Costs are made up of ALL costs passed down to the final retailer + ALL taxes passed down to the ultimate consumer

8. In a closed economic system (province, country) at which point taxes are collected is immaterial from an end price point of view since the ultimate consumer pays either way.
--------------------------------------

8. When a product is removed from one economic jurisdiction to another (international trade as an example) the tax removed in the exporting jurisdiction is lost to that jurisdiction and the resulting benefit gained by the importing jurisdiction

9. The lost tax must be recouped in another fashion by the exporting jurisdiction or government services in that jurisdiction must be reduced.

10. For the entire system, including all exporting and importing jurisdictions, to be tax revenue neutral, all jurisdictions must have equal Value Added Taxes applied in an equal fashion with respect to rebates. That does not happen, even under free trade agreements.

I might be all screwed up in my simplified version of things, but I am not about to believe a self interest industrial group that essentially tel me nothing other than "belive us" rather than showing me the full input-output scenario.

The way I see it, if we were going to sell BC coal, as an example, to people in BC, that would be fine. As soon as we sell to a jurisdiction outside of BC, those others in BC, will have to make up the lost consumer tax revenue in another fashion.

Posted by: gus on November 11 2010 11:16 AM

1. "The savings don’t go into someone’s pocket"

Many will not believe that. Prove it by clearly showing that mining management and shareholders do not benefit in 2011 from the tax decrease.

2. "they aren’t handed out as a dividend to share holders

Again, show us.

3. "those savings go right back into the ground so we can find new mines,

BUT, not necessarily in BC. Could be in another province or another country

4. or new deposits to keep existing mines running.

That would work, if it is not a choice but a requirement at time of rebate. However, I would hate for money to be ill spent by high risk explorations.

Posted by: socredible on November 11 2010 11:51 AM

Maybe the question is whether the mine's controlling shareholders are making more money from actually mining more minerals, or from mining the public with more hype to make a better price for their shares?

Posted by: Oldun on November 11 2010 12:41 PM

Just watched the noon news and there appeared to be all of three people attending this rally, That's got to tell a story. I'm just waiting for the Chamber of Commerce to say "me too". This is the group that filed a law suit to stop the wishes of 700,000 anti HST residents of BC. Democracy and greed in action.

Posted by: REALIST on November 11 2010 1:09 PM

Those savings sited by the mining company equal the exact amount of money that will be taken out of each and every taxpaying individual in Ont. and B.C. Pure clean tax shift. It is not right and no amount of corporate double talk will make it acceptable to this thinking taxpayer.

Posted by: RUEZ on November 11 2010 4:20 PM

LOL, mines get built where the minerals are. It doesn't make a damn bit of difference which province has the HST.

Posted by: shagrat on November 11 2010 5:11 PM

I am a private contractor and following party lines blindly supported the HST. Then one day I was called to task ie "why is HST good for small business? So I did the math ans sure enough HST is good for me.

First of all as a contractor I did not have to collect PST only GST. but the collecting is revenue neutral no matter what so 5%-12% no difference my clients have to pay no matter what the still need my services so I doubt I lose any clients because of HST.

But when it comes to paying HST to my suppliers. I am in computers and most of my supplies I would be paying 7% pst and 5 % gst any way. However when I had to do my remittance and it comes to figuring out the ITC. I would only get to refund the GST @ 5% now I get 12% back.

Posted by: gus on November 11 2010 6:18 PM

Thanks for posting that shagrat.
"So I did the math ans sure enough HST is good for me....... However when I had to do my remittance and it comes to figuring out the ITC. I would only get to refund the GST @ 5% now I get 12% back. "

I think many if not most understand that.

The key question is, however, the other part of the equation.

Now that you realize you are paying less in taxes, will you be passing those savings on to your clients that you will not be losing whether you pass the savings on or not?

Posted by: SummerSoul on November 12 2010 6:42 AM

And the propaganda barrage begins!

Watch for a concerted campaign by fat cats testifying as to how good added taxes on the families of British Columbia will be good for us all...especially the rich.

Posted by: Jimmi on November 12 2010 10:00 AM

scumbags.
If it's so good your businesses should start paying it and let the citizens of the province off of your hook.