HST is good for agriculture.
Following up with the letter to the editor recently from some local cattle producers on the benefit of HST to agriculture – here is a little more information as to why the HST is a good news tax for BC farmers.
Farmers through the BC Agriculture Council (this includes the BC Cattlemen) had been lobbying for a simpler more fair tax system for many years.
The previous system of GST + PST included a very confusing PST rebate system based on an annually updated list of items. Under the PST, farmers received an exemption from tax only on a limited list of items purchased solely for farm purposes.
While farmers were able to claim an exemption from PST on certain types of farm equipment, such as tractors, combines and incubators, they were required to pay PST on other types of equipment and many other business inputs.
The rebate system was awkward and very often left local businesses caught in the middle by not understanding and following correct procedures. Random audits were often done and businesses were responsible for paying the uncollected taxes if the correct procedures had not been followed.
One recommendation given during the BC Agriculture Council lobbying procedure was to simply allow the farmers to claim back all the agriculture PST at the same time as the GST, very simple, very fair and no businesses caught in the middle.
The new HST accomplishes all this and more. Under the HST, farmers receive a much broader benefit because they are able to recover the tax paid on all of their purchases for farm purposes.
The rebate system for the HST works the same way it did for the GST. Before the HST, farmers could recover only the five per cent GST and only the seven per cent PST paid on items on the “list”. Now farmers can recover the full 12 per cent HST paid on all their agriculture related expenses.
Interestingly the many years of lobbying the BC Agriculture Council did to try and harmonize the PST with the GST for agriculture expenses, was not connected to the resulting new HST; it was simply a byproduct of a new tax system the BC Government chose to implement.
The BC Agriculture Council predicts the tax benefit to agriculture with HST is upwards of $20 million dollars per year. This is a welcome relief to agriculture in BC where the carbon tax and the increase in the minimum wage is expected to cost agriculture about $40 million dollars per year.
Taxes are never appreciated and never popular and I think everyone agrees the most reprehensive aspect to the new HST is the way it was implemented, seemingly very sneaky and a behind the back approach for which Gordon Campbell paid dearly.
In the big picture and for the long term the HST is good for business, good for farmers and good for B.C. If the HST goes away; you, me and everyone else is not only going to have to come up with the tax loss out of our pocket in some other form, we are also going to be stuck with a very hefty price tag, penalty, to get out of the HST.
At the recent BC Cattlemen AGM convention held in Prince George both the BC Cattlemen and the BC Agriculture Council reminded those present to support the continuation of the HST in its present form and to pass the message on to all persons connected to agriculture and small business.