The B.C. government will complete a "comprehensive review" of its provincial sales tax (PST) this winter, says Small Business and Economic Development Minister Rick Thorpe.
"Do I ever see it (being eliminated?) I don't know if I ever see it," Thorpe told reporters after a speech to the Vancouver Board of Trade at the Sheraton Wall Centre.
"Is (eliminating the sales tax) a goal that I'd like to see achieved? Yes it is.
"But, you know, we have to do things as our government has done. Financial stability is important, sustainability is important and we are (conducting) a comprehensive sales-tax review in November to ensure that we have fairness, we have simplification and we have a streamlined process (so that) small business has more time to deal with their business rather than filling out reports for government."
Small-business operators often cite the seven-per-cent sales tax as a competitive disadvantage, and also express their frustration with having to collect it - and complete the necessary paperwork - on behalf of the province.
In recent pre-budget consultations with a government standing committee on finance and services, Retail BC, which represents more than 3,200 retailers across the province, pushed for further reductions to the tax, contending last year's 0.5-per-cent drop had no effect.
Another group, dubbed the Reduced PST Committee, has called on the Liberals to reduce the sales tax to four per cent in municipalities that border Alberta, a province that has no sales tax.
During his speech, Thorpe trumpeted the Liberals' efforts to reduce the sales tax since the party took office in 2001. When asked if he is in favour of a further reduction, Thorpe said Finance Minister Carole Taylor will decide whether to make cuts as she sets her future budgets.
Taylor recently said the government has no plans to reduce the tax further.
"We did have to increase the sales tax once to pay for (a salary increase) for the doctors," said Thorpe. "We said we would reduce that. We had the financial resources. We did that. I think our government has been very clear over its mandate. We've had 44 tax-related measures returning over $1 billion to taxpayers and small businesses. We will ensure that the tax regime of British Columbia stays competitive."
Some Atlantic provinces have harmonized the federal goods and services tax (GST) with their provincial taxes. But, in a question-and-answer session with luncheon guests, Thorpe quickly nixed the idea of B.C. doing likewise.
"The answer is a simple 'no,' and the reason is we feel we do not want to give our sovereign tax rights away to the federal government," said Thorpe, adding the province does not see the economic benefits of harmonizing the taxes at this time.
Thorpe made the comments on taxation while also promising to make B.C. the most small business-friendly jurisdiction in Canada and improve the government's track record with small-business operators, as part of the second phase of the Liberals' taxpayer fairness and service code.
He vowed that correspondence to him, his deputy minister and assistant deputy minister will be answered within 14 days. Meanwhile, Victoria will respond to general sales tax e-mail inquires within 20 business days, complete sales and hotel tax registrations within two business days, finish sales and hotel tax clearances within five days, and provide sales, hotel, fuel or tobacco tax refunds within 30 calendar days.
Thorpe also pledged to reduce the amount of time it takes small businesses to appeal sales-tax dispute resolutions - to six months this year and to five and 4.5 months in each of the next two years, respectively - from 11.7 months last year.
"This is a result of direct communication we had with small business owners and taxpayers," said Thorpe.
Improvements to the taxpayer fairness and service code were developed in conjunction with the Canadian Federation of Independent Business, B.C. Chamber of Commerce, Retail Merchants Association of British Columbia and Retail Canada.
Thorpe has also established a permanent 20- to 25-member small business roundtable group that will tour the province between now and next spring. Kevin Evans, chairman of the Coalition of BC Businesses and Linda Larson, mayor of the Okanagan town of Oliver, will serve as vice-chairs under Thorpe.
"It's very important for us to hear from small business in a very timely and regular way ... And it's important that we hear from small businesses in all regions of British Columbia, that we develop solutions and implement solutions based on (views of) those (people) that are actually working and developing small businesses."
Thorpe said he did not want to assume what small-business owners would talk about during the roundtable sessions, but he predicted the group will hear concerns about better ways to export products, ensure small businesses have enough working capital and further eliminate government red tape.
Vancouver small-business owners will almost certainly complain about the non-residential parking-stall tax, which the legislature approved last week by amending the Greater Vancouver Transportation Authority Act. The revised law allows TransLink, the regional transportation authority, to collect approximately $1.02 per sq. m, or about $30 per parking space, to help fund transportation projects like the RAV rapid transit line.
When queried by one luncheon guest, Thorpe said the tax was approved because it was originally introduced by the former NDP government in 1998 and TransLink, the Greater Vancouver transit authority, went through all the necessary processes required to revise the legislation.
"(Transportation) Minister (Kevin) Falcon has put a cap on it in his legislation and he's also put a sunset clause in it for review," said Thorpe.
"Those are things that we believe answer some of the concerns that we heard from the business community."
Jason McLean, president and chief operating officer of the McLean Group of Companies and chair of the Vancouver Board of Trade's small-business council, welcomed the creation of the new roundtable body.
"That's really important because everybody forgets that 80 per cent of the businesses that are members of the Vancouver Board of Trade are small businesses and we have our particular needs and concerns - and they're very important to the economy of B.C. as a whole," said McLean. "The minister of small business, as a former small-business owner and operator himself, has a unique perspective to offer and we're quite excited about getting involved in the dialogue between now and the spring."
The board of trade will monitor how the roundtable group deals with taxpayer fairness.
"We're just looking for the government to continue on its path of regulatory reform," said McLean, who received a plaque from Thorpe for his efforts to improve the plight of small business owners.
"We want (the province) to have a really good understanding of the challenges that small- business owners face in navigating that regulatory-compliance tangle and also the tax burden on our small business owners. The important message is that the government can continue to navigate these challenges without having to hire, you know, hired guns without having to navigate the morass. You need something that's easy, simple to understand and effectively communicated. If that is what comes out of this dialogue, we're very excited about it. We urge the government to keep it up."
McLean said small-business operators could let Thorpe off the hook on the parking tax because the province has to avoid burdening municipalities with transportation infrastructure costs - and he's not the minister responsible for finding ways to pay for RAV.
John Whalen, who operates a professional insurance practice in Richmond, welcomed the creation of the roundtable, adding vice-chair Evans has the ability to express small-business operators' views properly.
"I like the idea of there being a small-business voice," said Whalen.
"The board of trade has a pretty significant small-business voice, but I think that small- business council will add to the voice. I think that if they work with the board, there could be some good things brought to the attention of the government - and I'm sure they know what's going on. It's just simply a matter of: What hole in the dike do we manage first? We've got a lot of catching up to do."
(Monte Stewart can be reached at monte@businessedge.ca)
