B.C. Liberal Leader Andrew Wilkinson on Monday announced that to rebuild British Columbia’s struggling economy, a BC Liberal government will immediately eliminate the PST for one year, followed by cutting it to three per cent in year two until the economy recovers from the COVID-19 pandemic.
“British Columbians have lost confidence in the direction of the province and the weak economic record of the NDP. B.C. families and small businesses need help now, which is why a BC Liberal government will immediately eliminate the PST for one year — saving you money right away, getting more people working, and bringing investment back to B.C.,” said Wilkinson.
The B.C. Liberals said that as John Horgan and the NDP continue to hide the fact that this risky pandemic election is just an attempted power grab, they have introduced the first major pillar of their economic plan focused on helping all British Columbians get through the biggest economic challenge in generations.
“Countless people are still out of work, small businesses are facing bankruptcy, and the public health threat from COVID-19 is still very real,” added Wilkinson. “Eliminating PST puts more money in people’s pockets, stimulates growth for struggling small business, and helps British Columbians who are struggling to get by. This is a vital step to rebuild our economy.”
Under the BC Liberal proposal, a family of four earning $60,000 per parent will save $1,714 in the first year alone, followed by an additional $979 in the second year. This tax break will help consumers across the entire province, give businesses a boost when they need it most, and attract investors who have been scared away by massive NDP tax increases.
“Everybody pays the PST, so everybody saves under the BC Liberal plan,” said Wilkinson.
This BC Liberals said their plan means real, immediate savings for everyone at a time when they need it most — an unprecedented tax cut for an unprecedented time.
What is the estimated cost?
- Year one: $6.881B
- Year two: $3.932B
How will this help people?
A family of four earning $60,000 per parent will save:
- Average of $1,714 in year one
- $979 per year thereafter
A single parent earning $60,000 will save:
- Average of $924 in year one
- $528 per year thereafter
Impacts on income inequality
- As a flat tax, the PST targets low-income families’ spending much more than higher-income families.
- PST relief lessens the regressive effects that the tax has on a low-income family’s disposable income.
- PST tax savings will make life more affordable for all of us.
Impacts on housing affordability
- The Urban Development Institute estimates that PST relief will save $9 per square foot on wood frame construction and $12 per square foot on concrete construction.
- This could save up to $6,000 on the cost of a 500 square foot apartment and almost $19,000 on an average-sized home.
- Because construction costs are passed onto renters and buyers, this will allow for the construction of homes at lower prices, which will improve affordability.
Impacts on tourism
- Currently, PST is applied at 8% to hotel and other short-term accommodation sales in B.C.
- Providing a price break for tourists will aid the ailing tourism sector that has been all but ignored by John Horgan and the NDP.
- B.C. would forgo the roughly $1.8 billion in PST that is currently generated by the tourism sector, money that can flow back into the economy and encourage local tourism.
- Given that we have almost no foreign tourism expected in the coming months, this will encourage Canadians, and especially British Columbians, to visit B.C.
Impacts on natural resources, manufacturing, and other industry
- Real business investment is forecast to fall 10.8% in the 2020 fiscal year, which means B.C. needs a plan to promote investment.
- This unprecedented cut to PST will enable capital-intensive businesses to make record investments and create good, well-paying jobs.
- Businesses are often required to pay PST on investments like computers, vehicles, certain machinery, and other infrastructure; these costs are a deterrent to economic activity.
- Groups like the BC Business Council , Canadian Manufacturers & Exporters BC , and the BC Chamber of Commerce  all agree that the high-cost of PST is one of the major factors inhibiting new investment in B.C.
- BCBC asked for a bold PST cut on July 29, 2020, and Horgan ignored them.