British Columbians voted in favour of scrapping the HST

British Columbians voted in favour of scrapping the HST

PST reversion a taxing process

North Okanagan businesses dealing with switch back to PST/GST system.

You asked for it, and now it’s back.

As of Monday, the province officially ditched the harmonized sales tax (HST) and reverted back to the old PST/GST system.

British Columbians, led by crusading ex-premier Bill Vander Zalm, voted to scrap the ill-fated HST via a mail-in referendum in the summer of 2011, with 54.73 per cent of eligible voters (there was a 52 per cent turnout for a population of 1.6 million) choosing to get rid of the tax.

The list of goods and services that will cost less under the two-tax system is remarkable. As of Monday, consumers will be paying seven per cent less for: e-books, newspapers and magazines, dry cleaning, snack foods, restaurant food, catering and event planning services, basic cable television, residential land lines, taxi fares, camping sites, domestic travel (air, bus or rail) originating in B.C., real estate commissions, vitamins and supplements, admission fees for movie, theatre, cultural and sporting events, golf and gym memberships, bicycles, massage therapy, hair stylists and estheticians, veterinary services, accounting services, courier services and tobacco.

Several goods and services will see a hike in price, most notably alcoholic beverages, which will increase from the 12 per cent HST to a 5+10 per cent GST/PST. Also, short-term accommodation (hotel stays) will increase by one per cent.

For a comprehensive list, visit www.pstinbc.

According to small business minister Naomi Yamamoto, about 75,000 businesses had updated their point of sale systems to be PST-compliant before April 1, while another 25,000 hadn’t begun the process.

Businesses will not be able to purchase goods from their supplier tax-exempt without providing a PST number or completing a certificate of exemption. Suppliers must show the PST registration number on the invoice or sales document, or maintain a properly completed certificate of exemption, to support their non-collection of the tax.

A wide range of tools and services are available to help businesses prepare for the re-implementation of the PST including: one-on-one consultations with a government tax specialist; and online webinars covering the general principles of the PST.

Businesses with questions about the PST can call toll-free 1-877-388-4440, or e-mail Further online support services for businesses are available at

To register for a PST number, visit

According to Jon Milligan of White Kennedy Chartered Accountants, many established companies are familiar with GST and PST. It is new companies that may face greater challenges.

“A lot of new businesses have opened since the HST introduction on July 1, 2010 and they still need to register for PST,” said Milligan. “It’s these businesses that could potentially fall through the cracks during the transition process.”

Roger Houle, Valley First’s assistant vice-president of commercial banking, believes the transition back to GST and PST has come about rapidly for small business.

“Small business owners face many challenges larger companies can avoid,” said Houle. “They are often the bookkeeper, sales force, HR and IT departments, all rolled into one. With all the demands on the small business owner, while it may have an impact on the business, it is understandable that the switch back to GST and PST has crept up on many people.”

B.C.’s restaurant industry welcomes the PST’s return.

“Effective (April 1), the 2.7 million guests who visit British Columbia restaurants every day will pay less for restaurant meals,” said Mark von Schellwitz, Canadian Restaurant and Foodservices Association vice-president, Western Canada.

Von Schellwitz says restaurant sales in B.C. fell dramatically when HST was introduced, costing the food service industry a total of $1.5 billion in lost sales. He added B.C.’s cumulative restaurant industry sales grew at by 1.4 per cent since HST, compared to 11.5 per cent for the rest of Canada during the same period.

CRFA forecasts that B.C.’s restaurant industry will grow by 5.1 per cent in 2013.

However, not all restaurants feel the HST was overly onerous. Chance Temple, owner of the Riverfront Pub in  Grindrod, said the HST probably could have worked had the government handled its implementation a little more smoothly.

Temple responded to a poll on The Morning Star’s Facebook page, saying: “Going to be interesting to see the reactions at our pub/restaurant. We initially felt a hit on food sales when the HST came in, but business came back and things went back to normal.”

Regarding the switch back to the two-tax system, he added: “A surprising amount of people are not even aware of the switch back to the GST/PST system!

“The change back to the old system felt poorly supported. We applied early for our PST number and didn’t get it until the last minute, which left us scrambling to get our suppliers updated.”

Here are some other Facebook poll responses from North Okanagan businesses and consumers…

Teresa Deak, owner of Social Butterfly Solutions – “The whole thing has been an unfortunate mess. The government of the day probably could have gotten buy-in from the voters if they had implemented the HST with one per cent tax reduction across the board and made the HST only 11 per cent.

“They may have even gotten us to reluctantly accept the tax if they had put any effort at all into selling it to us. But their arrogance backfired and the people were angry.

“The combined HST reduced administrative burden and overall tax costs for businesses by allowing all HST paid by the business to be deducted from the HST charged on their sales. This simpler system was definitely good for business.”

Ingrid Baron of Emerald Valley Sprinklers: “Should have kept the HST. The PST just becomes a hidden cost which the consumer pays for in the end anyway.”

Kari Gares, co-owner of MHC Mortgage House: “HST was a good thing for our business, allowing us to claim back a larger portion of taxes paid. In the end, the consumer pays for the switch back.”

Paula Harned of Lumby: “People wanted less bureaucracy – the HST eliminated an entire department of the bureaucrats in Victoria. I will admit, the Liberals did not deliver this in the best possible way. But, now every member of this province will pay because some people fail to see good policy even when it is delivered to them on a silver platter.”