THE TRI-CITIES NOW | WEDNESDAY, JUNE 19, 2013
11
NEWSN0W
Return to PST/GST to hurt city coffers
CHANGE TO COST ABOUT $288,000
1.75-per-cent tax cost, which was factored into the last three budget years. But with the GST/PST, which was reinstated on April 1, the PST is applied to the purchase or lease of Jeremy DEUTSCH new goods consumed. Local jdeutsch@thenownews.com governments continue to be As consumers get used to entitled to the GST rebate, paying two taxes for their but there is no tax credit for favourite items, at least one the seven-per-cent PST. Mayor Mike Clay said the Tri-Cities community is feeling the pinch with the return city knew the HST would be a benefit to most muniof the PST/GST. cipalities, According to especially in a staff report smaller compresented to munities like council recentPort Moody. ly, the return It is too bad He noted to the two-tax that we got rid that as far system will back as 2008, hit the city’s of the HST and Port Moody capital budget went back to projected a to the tune of the PST. blended tax $288,000. would save That num–Mike Clay the city nearber doesn’t Port Moody Mayor ly $200,000 include the annually by constr uction reducing capof the fire hall, which is an example of a cap- ital budget requirements. “It is too bad that we got ital project. The report noted that rid of the HST and went back under the HST, local govern- to the PST,” Clay said. The change back to the ments were entitled to receive 100 per cent of the GST as a PST/GST will cost the city rebate and 75 per cent of the another $169,000 for the fire hall. PST as a tax credit. A separate report with That meant goods the city purchased were subject to a greater detail on the tax cost
related to the building’s construction is expected in the future. The city report also indicated that increased costs for the various capital projects affected would be absorbed in their budgets with little or no change to the scope of the work. It appears the effect of the tax change varies per municipality. Earlier this year, the City of Port Coquitlam, responding to a request by the Tri-Cities NOW noted the impact to the city’s bottom line would depend on the spending mix. An e-mail statement indicated the cost of materials and equipment would be greater after the transition because no rebate will be received for the PST, yet the cost of exempt services will be reduced because no PST is charged. “While individual municipal rebates were expected to vary, Port Coquitlam’s net affect was nominal depending upon the mix of goods and services purchased in the
year,” the statement read. “We expect the same when we transition back.” The statement also noted the city was in the process of
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reviewing the HST to ensure the municipality captured all the amounts owing and receivable prior to the April 1 transition date.
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