If your mother promised she wouldn’t serve you broccoli for dinner but she did anyway, would you punish her? But you didn’t know any better because you hadn’t yet learned about the health benefits of broccoli. Well screw her, she shouldn’t have served you broccoli – I refer to the HST, now being reverted to the PST.
This is the principle B.C. voters chose to exhibit, however, displaying complete ignorance to the facts, which will in turn hurt them in the long run.
Today we switch over to the PST. The cost of capital goods rises seven per cent as businesses will only be able to claim deductions for the GST and not the PST. This affects every industry and may just tip some companies out of B.C.
Manufacturers will be forced to pay taxes on each input; even on inputs of inputs of inputs (think machinery, paper towels, lubricant, etc.). It can have a cascading effect to pay tax multiple times for the same input. The manufacturing/retailer chain then charges more to the consumer because they were unable to write off the PST tax on inputs.
Hollywood North is declining and petitions have been set up to save B.C. film. B.C. is already uncompetitive with lower tax credits and now the PST produces additional cost to a struggling industry.
Every strand of cashflow is important for startups moving to scale. This can affect purchasing a capital good to increase efficiency and ultimately making a new hire. Does the next home-grown Google move to better pastures in Silicon Valley and take thousands of jobs out of B.C.?
Those are but a few industries affected. BC chose to “take back democracy,” like it was in a Syrian dictatorship. You could’ve just voted out the BC Liberal government if you didn’t like them. Instead we backpedal to an archaic tax system, against the expert suggestions from a country which produces some of the smartest economists in the world.