The British Columbia Harmonized Sales Tax, called the B.C. HST will come into effect on July 1st, 2010 and will combine or harmonize the provincial sales tax (7% PST) with the federal Goods and Services Tax (5% GST)

Everything you need to know about the new B.C. HST - Harmonized Sales Tax Resources, Articles, Reaction


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The BC government will seek to return to a Provincial Sales Tax within 18 months,
meaning the old tax will be restored by March 31, 2013. STAY TUNED FOR MORE INFO.
announced on February 17, 2012 by Finance Minister Kevin Falcon

Are you wondering what the major differences between the Atlantic Canada Maritime HST and that of the newly introduced B.C. HST are? Look no further as this article examines the differences between the pre and post Harmonized Sales Tax processes between Newfoundland, New Brunswick, Nova Scotia and now British Columbia. Some fundamental differences between the BC HST versus the Maritime HST are quite surprising, but the BC Liberal Government certainly has tried to squeek this by the general public during the summer.

Number Crunching - HST Price Chart - New Home HST Tax Increase - Harmonized Sales Tax Price Difference on New Property

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Story Highlights
The Maritime HST was introduced in 3 Maritime provinces in 1997 including Newfoundland/Labrador, Nova Scotia and New Brunswick. BC HST is set to be introduced in 2010.
The Maritime HST REDUCED the combined tax rate upon introduction: Newfoundland (from 19% to 15% to 13%) and Nova Scotia and New Brunswick (from 18.7% to 15% to 13%). The BC HST DOES NOT reduce the combined tax rate as it is 12% (7% PST plus 5% GST) making consumer goods and services more expensive as most items were not previously taxed the 7% PST tax.
The Atlantic Canada HST has INCREASED capital investment. The B.C. HST should increase capital investment, but that is yet to be determined.
The Maritime provinces consulted with business and other industries prior to the introduction of the Harmonized Sales Tax. British Columbia did not consult with any industry or consumer group prior to their announcement. The BC Liberal Government also broke their election promise.

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New Home HST Tax Increase and the B.C. HST Price Difference for New Property Purchases - CHART
Anti-HST Movement including NO BC HST Facebook Campaign, NDP Petition & Recall Campaign Against Liberal Government
British Columbia HST on Rent? How does harmonized sales tax 12% HST on rental housing and Vancouver rents?
Top 10 Benefits about the HST and the B.C. Government Announcement
Comprehensive List of Goods and Services Subject to New B.C. HST, HST Exempt Products, HST Rebates and Input Tax Credits
The BC Harmonized Sales Tax HST Rebate for New Home Purchases - Actual Number Crunching
The BC HST Transitional Rules and Policies May Follow the Ontario HST Transitional Rules
Reaction From B.C. Home Builders and Vancouver Developers on new BC HST and What It Means to the Construction Industry
Differences between BC HST versus Ontario HST | BC HST versus Maritime HST in Newfoundland, Nova Scotia & New Brunswick
B.C. Harmonized Sales Tax will effect Green Initiatives, Energy Efficient Upgrades, Home Renos and BuiltGREEN products
12% BC HST on New Homes, Presale Condos, Pre-Construction Real Estate, First Time Home Buyers and Ownership

How Are the Maritime HST Taxes Different from the B.C. HST? New Brunswick, Nova Scotia and Newfoundland HST Versus BC HST
So what are the HST differences between the provinces? Is the BC HST different then the Harmonized Sales Tax in the Maritimes? There are some major differences between the Nova Scotia, Newfoundland/Labrador and New Brunswick HST tax and that of the one in British Columbia, but not many people understand how different they actually are. Although the BC Government points to the Maritime HST as a comparable, there are some big fundamental differences between the taxes, especially considering that the total taxes in New Brunswick, Nova Scotia and Newfoundland actually went DOWN after the harmonized sales tax was implemented. This article discusses other differences and provides information regarding the HST differences between provinces in Canada.

So What’s The Deal – Is The BC Government Implying That The B.C. HST Was Introduced for the Same Reasons as the Atlantic Canada Maritime HST?
In late July 2009, the BC Liberal Government announced that the Harmonized Sales Tax would be coming into effect in 1 years time for July 1st, 2010. With the combination or harmonization of the 2 taxes in British Columbia, one would expect to see a tax break for the public, but on the contrary, the 12% HST tax in BC actually increases the tax burden on everyone. According to some analysis, the BC HST versus the Maritime HST is very different. For one, the Maritime HST (implemented by Newfoundland/Labrador, Nova Scotia and New Brunswick) actually DECREASED the tax burden on the regular consumer while it has proven to INCREASE capital investment in the province’s industries. Back in 1997, when the Atlantic Canada Maritime HST was introduced, the combination of the provincial sales taxes with the federal GST actually would have resulted in a Newfoundland HST at 19% and a Nova Scotia and New Brunswick HST rate at 18.7%. However, this was not the case in 1997. Upon the implementation of the Maritime HSTs, all 3 provinces opted for the lower 15% Harmonized Sales Tax, effectively dropping the total tax burden to consumers by 4% in Newfoundland and 3.7% in Nova Scotia and New Brunswick. Therefore, the Atlantic Canada Maritime HST actually REDUCED the total taxes paid for consumer goods and services in all 3 provinces. Fast forward to today, the Maritime HST of 15% has been again REDUCED to 13%. Through the first 10 years of implementation of the Atlantic Canada HST in the Maritime provinces, the Harmonized Sales Tax has been reduced by 6% in Newfoundland and Labrador and 5.7% in the other two provinces … a reduction in HST taxes by a whopping ~31.5%! It’s great to be a resident there compared to BC at this moment!

Consultation with Business Industry and General Public Is Another Major Difference Between the Atlantic Canada HST Implementation and That of the B.C. HST Backlash
According the the Canadian Federation of Independent Business, another key difference between the Maritime HST versus the BC HST system is that Atlantic Canadian provinces consulted with many business and industry groups before the tax was ever introduced. The problem in British Columbia stems from the fact that the BC Liberal Government broke their election promise about the introduction of a provincial/federal HST tax and that they NEVER consulted the business industry or any other industry groups like the construction or hospitality industries that will see a major impact next year. With plenty of surveys, round table discussions and consultation in the Maritime provinces of Newfoundland, New Brunswick and Nova Scotia, the Atlantic Canada HST went through many modifications as different concerns and issues were brought up. These were ironed out before the introduction of the Maritime HST including rebates, rules and policies surrounding the tax situation for consumers. However, in British Columbia, the BC HST tax has been introduced without prior engagement with the hospitality or homebuilders industries in addition to tourism. This leads us to the next difference between the Maritime and BC situations. Currently, BC tourist industry is not subject to the 7% PST tax, and therefore, the introduction of the 12% HST effectively pushes up the tax rate by seven per cent. Because tourists are so price sensitive, this can have a detrimental effect on the BC tourism industry. However, before the Atlantic Canada Maritime HST was implemented, all three provinces applied their provincial taxes on the tourism industry. Therefore, the introduction of the HST actually reduced the taxable rate on the tourism industry in Newfoundland, Nova Scotia and New Brunswick, giving the tourists a bigger break and more incentives to plan their holidays in Atlantic Canada.

Comparing the Homebuilding Industries in Atlantic Canada and B.C.
As indicated in several surveys and industry analysis, new housing starts in Atlantic Canada where the Harmonized Sales Tax was introduced, dropped up to 12% a year later. This is a significant drop that affects thousands of professionals in the homebuilding industry. As Atlantic Canada Maritime HST served to reduce the tax burden on everyday goods and services, it is noted that the cost of housing actually went up due to the Maritime HST. Any increase in home ownership or homebuying in BC and especially in expensive markets like Greater Vancouver, Victoria and the Okanagan will likely decrease affordability to a point where it will cut out thousands of people looking for new homes. This will gravely affect the BC homebuilding industry.

One of the benefits that the BC Liberal Government is pushing is that the 12% HST is of benefit to small business that take advantage of the tax breaks and input tax credits that they can claim. In addition, the BC HST reduces the marginal effective tax rate on new business investment, which should increase the competitive nature of the province against other regions. New investment capital before HST implementation is at 27% and afterwards, it will drop a significant amount to 16%. With any changes, it is also noted that it takes time for people to adjust to taxes. A majority of residents in the Atlantic Canada Maritime provinces where the HST was adopted now support it. We’ll just have to wait and see in BC and how this new harmonized sales tax will affect consumers, various industries and investment capital in the province.

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