HST takes effect on same day as Premier Gordon Campbell's newest trade agreement

    1 of 1 2 of 1

      Premier Gordon Campbell signed a trade agreement on April 30 that ensures Saskatchewan and Alberta companies don't need to set up offices in B.C. to carry on business activities.

      The New West Partnership Trade Agreement takes effect on July 1, which is the same day that B.C.'s harmonized sales tax will start being collected.

      Alberta does not have a provincial sales tax, which means companies there only need to charge the five-percent GST. Saskatchewan has a five-percent provincial sales tax, and has not signed onto the HST.

      In B.C., the new 12-percent HST will combine the GST with a seven-percent provincial sales tax, which will be extended to many new areas already covered by the GST. This translates into a new seven-percent charge on such purchases as tickets, bicycles, club memberships, home renovations, and many professional services. Companies will be allowed to reclaim business inputs, which will result in a $1.9-billion tax shift from business to consumers.

      In a previous interview with the Georgia Straight, anti-HST campaigner Bill Vander Zalm, a former premier, has claimed that Alberta companies would be able profit from B.C.'s HST at the expense of B.C. companies.

      He maintained that this could be done by selling services, such as home renovation, in B.C. through an Alberta office and not charging HST.

      Under article 11, which deals with investment, the New West Partnership Trade Agreement states: "A requirement by a Party that an enterprise has an agent located within its territory for service of notices of proceedings or other judicial documents is deemed not to be a requirement to establish or maintain a local presence or to be resident in its territory. Parties shall further consider options for eliminating measures requiring the designation or maintenance of agents for service."

      The New West Partnership Trade Agreement is one of four agreements signed by the three provinces on April 30. It is silent on the HST.

      The trade agreement grants exceptions to the signatories in many areas, including taxation.

      The deal stipulates that nothing will prevent a party from establishing a monopoly. This means that B.C. won't be required to allow private-sector competition for ICBC's basic vehicle insurance.

      The agreement also provides exemptions for aboriginal peoples, water, social policy, and labour standards.

      The latter exemption means that B.C. can continue to offer the lowest minimum wage in the country and that Alberta can still allow for the use of replacement workers in labour disputes.

      The three provinces will offer open and nondiscriminatory procurement for "departments, ministries, agencies, boards, councils, committees, commissions and similar agencies" where the procurement value is $10,000 or greater for goods, $75,000 or greater for services, and $100,000 or greater for construction.

      For Crown corporations and other government-owned commercial enterprises, this will be $25,000 or greater for goods, and $100,000 or greater for services and construction.

      In addition, the agreement states that there will be open and nondiscriminatory procurement for local and regional governments. Here, it will apply to $75,000 or greater for goods and services, and $200,000 or greater for construction.

      The three provinces agreed to "reconcile their business registration and reporting requirements so that an enterprise meeting such requirements of one Party shall be deemed to have met those of all other Parties".

      In addition, the agreement states that the provinces and municipal governments "shall consider options to provide for the reconciliation" of municipal business licences, but this won't occur until after provincial reporting requirements are addressed.

      Three-member dispute-resolution panels will be created to issue legally binding orders in response to any complaints. These panels will be allowed to offer financial awards up to $5 million.

      Similar to the North American Free Trade Agreement, companies can file complaints and have access to the dispute-resolution system.

      The World Trade Organization, on the other hand, requires complaints about unfair trade practices to be filed by governments, which means that individual companies don't have direct access to the arbitration system.

      Any ruling by a dispute-resolution panel under the New West Partnership Trade Agreement will be subject to judicial review.

      Each province can withdraw from the agreement by giving 12 months written notice.

      Follow Charlie Smith on Twitter at twitter.com/csmithstraight.

      Comments

      14 Comments

      pillaging

      May 2, 2010 at 11:03am

      More union busting and shoving privatization down our throats by BC's worst premier ever.

      0 0Rating: 0

      cheryl

      May 2, 2010 at 11:56am

      this government has got to go!

      0 0Rating: 0

      The "Liberal" Party is dead to us

      May 2, 2010 at 3:11pm

      Gordon Campbell must be suicidal and he's going to take his entire party down with him.

      If Liberal MLAs have any brains they will start abandoning him and his loyal corrupt cabinet ministers. Otherwise this party will get NO votes next election.

      What has characterized this "Liberal" Party? Corruption, scandal (from that first drunk driving charge to BC Railgate), lies, neoconservative fiscal policy, miserliness when it comes to the poorest and middle class, and generosity when it comes to the wealthiest.

      BC has the lowest minimum wage of any jurisdiction in Canada and the highest poverty rate, despite the hyped Olympics (which ended up costing the tax payer much more than it benefited the tax payer). If BC has no revenues to cover services it's because Campbell slashed personal and corporate tax to the bone and when the recession hit, found itself without sufficient funds. This is why it needs the HST.

      There isn't a single MLA in Campbell's dictatorship who will survive the next election. They are all tarnished by having sided with him on every issue. BC voters would have to be complete morons to let this Party survive the next election.

      The HST will kill this government. Having said that, if BC elects a government that spends the revenue it generates on social services, specifically health care, transportation infrastructure, education, and child welfare, to name a few, the electorate could probably get behind it. I know I would. I just don't trust Campbell to ever spend a dime of the revenue on ordinary working people. If HST becomes a done deal, the government needs to be one that commits to services that benefit the people. That's the only way this will fly.

      0 0Rating: 0

      ds

      May 2, 2010 at 3:22pm

      more head office will be leaving B.C. for greener pastures and Gordy and his boys will be getting big bonuses for the next eletion but I don't think it will work for them this time.

      0 0Rating: 0

      Former Premier Bill Vander Zalm

      May 2, 2010 at 8:50pm

      “This government is so mad that they are losing public support on this issue that they have turned on the very people who elected them. It is outright dictatorship and they must be stopped before this peaceful revolt against them turns ugly. They are doing everything in their power to try to intimidate people from participating in democracy, and it is frankly quite scary.”

      “In all my years in politics, I have never seen anything like it,”

      0 0Rating: 0

      "It is outright dictatorship" (Bill V.)

      May 2, 2010 at 11:09pm

      This is a serious and frightening statement for a politician to make. It is time to pay very close attention to this government.

      0 0Rating: 0

      Evil Eye

      May 3, 2010 at 8:43am

      Thanks 'Gardener Bill', you are on the right track. Like a good wine, you have matured over the years. You care more about BC, than than any Liberal and you are the man of the people!

      We live in strange days, where once diametrically opposed people are uniting to save the province from evil.

      0 0Rating: 0

      Shepsil

      May 3, 2010 at 9:29am

      If you care, make sure you sign the HST recall! It is our only chance to stop the "rape and pillage" attitude of the BC Liberal gov't.

      0 0Rating: 0

      jayne

      May 3, 2010 at 10:54am

      so, let me get this straight...we are charged the hst while our govt is giving out of province companies license to do business here, while working out of their offices in a lower taxed province,hiring in the lower tax provinces while taking jobs away from BC...did I miss something? How does this help our economy? How does this keep bushiness in BC?

      0 0Rating: 0

      Vander Zombies

      May 3, 2010 at 10:59am

      Vander Zalm thinks we should have a PST that applies to everything and that businesses should be exempt - and yet so many people still blindly follow him and sign his petitions and think he is the saviour of BC. His plan is even worse than HST. Think for yourselves!

      "British Columbia could easily make the provincial sales tax work the same way as a value-added tax," [Vander Zalm] wrote in a letter to the editor last week. "It could apply it to all goods and services."

      Read more: http://www.vancouversun.com/business/like+Fine+what+your+alternative/297...

      0 0Rating: 0