Podunk Below the Masthead, Tuesday, July 28, 2009

Not particularly harmonious over the Harmonized Sales Tax, the bright lights of Toronto could beckon for a local performer and a local commercial fisherman tackles the sport fishery issues.

RUPERTITES ARE TAKING A LONG LOOK AT THE HST-- The reaction is growing fast with the Gordon Campbell Liberals in effect yelling out "surprise" with their recent announcement that BC will harmonize its taxes with the Federal GST. And British Columbians are looking towards July of 2010 with a little bit of anger over the potential increases in tax collection on such things as haircuts and housing sales to name a few. Tuesay's Daily News outlined some of the background on the Harmonization project (see story below)

It's all in the hands of the national audience now, as Kimberly Truong waits to see if her audition performance on "The Next Star" on YTV will send her off to Toronto for further competition. That program was to air on July 31st, after which the audience will hold the fate of her dreams for this competition. Tuesday's Daily provided a look at the process so far in her quest for further fame. (see story here)

The debate over the impact of the sport fishery on the commercial industry continued on in the letters to the editor pages of the Daily News, as local commercial fisherman Raymond Guno weighed in with his thoughts on the current fishery debate (see story here)

Tuesday's sports page featured local pro golfer Moe Hays weekly column, including a review of the weekend of golf from the junior golfers.

Total pages in the Tuesday edition (12)

Front page, headline story:

RUPERTITES ARE TAKING A LONG LOOK AT THE HST
By George T. Baker
The Daily News
Tuesday, July 28, 2009
Pages one and five

On July 1, 2010 British Columbians will start paying a Harmonized Sales Tax, which would replace the current PST and GST system.

At first blush, given that there will still be a 12 per cent charge on most goods, it would appear that the new HST won't make much difference.

But there are changes to who gets exempt and for how much. Gone are the exemptions for food, housing sales above $400,000, haircuts and newspapers.

However, the government would offer a refundable HST credit to low-income British Columbians. It would also include exemptions, similar to the provincial tax, on items such as gas and diesel fuel, books, children's clothing and shoes, children's car seats, diapers and feminine hygiene products.

B.C. receives 51.6 billion from the federal government for going ahead with the plan. Finance Minister, Colin Hansen, said that money would be turned over to British Columbians in the form of tax breaks and rebates.

But he also acknowledged the prices of some services could go up in the near term.

"Consumers will perceive there to be an increase in the cost of some things," he said.

However, Hansen said the provincial tax is currently often imbedded in goods even though consumers can't see it on the price sticker.

He believes the cost savings that businesses will see from a harmonized tax will be passed on to consumers in the form of lower prices.

Two local accountants believe that marrying the provincial sales tax (PST) and the goods and services tax (GST) should be bliss for business owners.

Praveen Vohora and Odd Eidsvik both firmly believe that in the long run the move by BC Liberals to harmonize both taxes was the right one. They believe it would help cut down on paperwork, which both said are added, unnecessary costs when having to complete two tax returns each year.

"If we can avoid two returns and just send in one, that would be wonderful," said Eidsviik of Eidsvik and Associates.

Vohora, the owner of accounting firm Vohora and Associates, said that even for his own organization the savings would be immense due to the ease of training staff.

"It's harder to administer business with two levels of tax because you have to train your staff on how that works," said Vohora.

He added the second advantage was the way the GST system worked, which the HST would mirror.

"You take a manufacturer. When you manufacture goods, you pay GST. When manufacturers sell, they collect PST, but they deduct the GST that they had paid on all the materials. So, it effectively just passed that GST on to the consumer - at zero cost to them," said Vohora.

But there will be some small business owners who believe that this will hurt their bottom line.

Because the new structure would remove previous provincial exemptions from taxable goods and services such as coffee and muffins, food services are likely to see a price increase. For Cowpuccionos' owner Judd Rowse, that could prove costly for him terms of customers.

"The bottom line is small ticket items will cost more and that's going to be passed on to the consumer rather than the shop owners," said Rowse.

He said the new system would not be beneficial for him.

In fact there has been wide spread concern within the restaurant industry that the HST would raise prices on customer bills. Food used to be exempt from the PST, which meant that a receipt would only include a five per cent levy on dinner.

However, Rowse said he believed that the big ticket items such as fine dining shouldn't see as much of an effect as smaller operations like his.

But Eidsvik does not agree with Rowse that his prices would go up.

"I can't see the Be government allowing them to, let's say, tax things that they don't tax in the GST," said Eidsvik.

Ontario will move the HST on the same day as B.C. and that would leave only three provinces that have not jumped on the HST band wagon - Manitoba, Prince Edward Island and Saskatchewan.

With files from Canadian Press