VANCOUVER, B.C. —B.C.’s unpopular and controversial Harmonized Sales Tax (HST) has been defeated by a vote of 54 per cent (yes) to 45 per cent (no) in last week’s referendum.The move is being applauded by the Canadian Restaurant and Foodservices Association (CRFA) and quietly acknowledged by the British Columbia Restaurant and Foodservices Association (BCRFA). The HST came into effect July 1, 2010.
A disappointed B.C. Finance Minister Kevin Falcon said the government will restore the old provincial sales tax system by March 31, 2013. He said exemptions on products and services under the old system — seven per cent PST on some goods and services, plus five per cent federal GST — will return.The province will also have to repay $1.6-billion in “transitional assistance” funds Ottawa gave B.C. as part of an HST agreement the two governments signed in late 2009.
CRFA’s Western Canada vice-president Mark von Schellwitz welcomed the results, commenting “the HST has challenged the province’s restaurant industry… by adding a new seven per cent provincial tax to all restaurant food. The HST creates an unlevel playing field — whether or not food is taxed depends on where it is purchased.” BCRFA president and CEO Ian Tostenson commented, “We applaud the provincial government for having the courage to put the HST decision in the hands of the general public. This has been a very exhausting and at times divisive issue for business, consumers and government.” The HST had been applied to many more things than the old PST, including restaurant meals, live entertainment, domestic air, bus and rail travel, gym memberships and new homes. On the other hand, the sales tax on alcoholic beverages actually dropped, from 15 per cent to the HST rate of 12 per cent.