B.C. is "throwing away" cash on HST repayment, Bill Vander Zalm says
Ex-premierBill Vander Zalm says Victoria didn’t do a good job of negotiating the repayment of the $1.6 billion given by Ottawa to the province for adopting the harmonized sales tax.
"They’re throwing away our money," Vander Zalm told the Straight by phone.
The B.C. government has agreed to pay back the full amount over five years. But Vander Zalm estimated that the federal government will have gained $1 billion in additional corporate income taxes with the HST shift.
"It used to be that if a corporation paid PST [provincial sales tax], it was a company expense and they would deduct it from their income, and therefore not paying income tax," he explained. "Now because they’re getting their money back [through recoveries of the provincial component of the HST], it becomes income, and it becomes taxable. So the federal government picks up a lot of money from the province."
Vander Zalm suggested that the province should repay only $600 million.