B.C. businesses will see savings in the new year, resulting from the Province’s 50% cut to the provincial sales tax (PST) on non-residential electricity, Finance Minister Carole James announced on Wednesday.
“B.C. is the only jurisdiction in North America to charge sales tax on electricity used by businesses. We are changing that and helping businesses here in British Columbia become more competitive,” James said. “Cutting the PST on electricity is one way we are helping business owners build a sustainable economy that benefits everyone.”
Following the 50% reduction that starts on January 1, 2018, government will completely eliminate the PST on non-residential electricity on April 1, 2019. Residential use of electricity is already PST-exempt.
Eliminating the PST on electricity will translate into savings of more than $150 million annually for B.C. businesses. This will help them create more jobs for British Columbians, expand into new markets, and reinvest in new technologies.
Estimated annual PST paid for electricity use, by industrial sector is as follows:
- Manufacturing, including pulp and paper: $46 million
- Other services (repair and maintenance, personal care services, etc.): $27 million
- Wholesale and retail trade: $21 million
- Primary industry (forestry, mining, etc.): $21 million
- Accommodation and food services: $11 million
- Transportation and warehousing: $11 million
- Arts, entertainment and recreation: $5 million
- Construction: $2 million
- Other industry sectors: $17 million
The change supports government’s plans to invest in a sustainable, innovative economy by encouraging business owners to transition to low-carbon electricity as an energy source.
Two other tax changes will also take effect January 1, 2018:
- Exempting natural gas from the motor fuel tax when used as a locomotive fuel.
- Increasing the tax on cigarettes to 24.7 cents per cigarette from 23.9 cents per cigarette.