B.C.’s harmonized sales tax may be out of step with efforts to encourage green, energy-efficient homes.
That’s because the HST—to be brought in on July 1, 2010—could eliminate an exemption from the provincial sales tax for materials and equipment used to conserve energy, according to advocates of environmentally friendly dwellings.
“We haven’t got a clarification yet, but it is a concern for us for sure if they were to put the PST back on those or the equivalent,” Helen Goodland told the Georgia Straight.
Goodland is the executive director of the Light House Sustainable Building Centre, a Vancouver-based nonprofit organization that promotes awareness of sustainable building practices.
Under the current setup, energy-efficient materials like thermal insulation and premanufactured windows, doors, and skylights are exempt from the seven-percent PST. The same exemption also applies to qualified furnaces, boilers, and heat pumps if purchased or leased for residential purposes.
In its 2008 budget, the B.C. Liberal government also provided PST exemption for energy-efficient appliances such as refrigerators, freezers, and washing machines. Then–finance minister Carole Taylor said in her budget speech that this was part of the government’s four-year, $1-billion investment in various programs and incentives to encourage greener choices in the transportation and residential sectors.
Many of the PST exemptions, including those for qualified windows and doors, were originally slated to remain in effect until March 2011.
Goodland said that coupled with the provincial government’s LiveSmart B.C. program, which offers rebates on environmentally friendly goods, these PST exemptions have helped encourage more people to undertake energy-efficient renovations and make green purchases.
The federal government also provides rebates for home retrofits. For example, a homeowner in Metro Vancouver who buys an energy-efficient oil furnace won’t have to pay the PST and will receive a refund of up to $520 from the province and $375 from the feds.
The HST will incorporate the seven-percent PST and the federal goods and services tax of five percent, for a value-added sales tax of 12 percent. The government has yet to table legislation on this new tax.
Like Goodland, Peter Sundberg, executive director of the nonprofit group City Green Solutions, has some concerns about the HST’s potential effect on energy-saving home-building items.
“Taking away the PST exemptions on these products is a backward step, and it sends a completely mixed message on where the province is going,” Sundberg told the Straight.
Services offered by City Green Solutions include advising homeowners on how to improve the energy efficiency of their residences. The group also helps people tap into grants from the provincial and federal governments.
“Groups like City Green go into energy assessment, which provides them with access to the grants, and in turn that homeowner goes and buys windows off Jill the window girl or Jack the insulation guy,” Sundberg explained. “And that could be all over the province. What’s happening is we’re having the best type of economic stimulus throughout the province. Energy-efficiency improvements at home is probably the most sensible and cost-effective thing that both the homeowner and the province can invest in.”
The province has made public a small number of items that will be HST–exempt. These include gasoline, diesel fuel, marine diesel, and aviation fuel, which will be eligible for point-of-sale rebates.
Some items that were previously PST–exempt, including haircuts and restaurant meals, will be subject to the HST. According to Pete McGee, cofounder of Greenworks Building Supply Inc., a company that sells environmentally friendly construction materials, the province will earn more revenue by increasing the range of goods and services that are taxed.
With more money in its coffers, McGee told the Straight, the province should be in a position to exempt energy-efficient materials for homes, but he has doubts as to whether this will happen. “In a lot of ways, this [the HST] is not a step in that direction,” he said.