Ladysmith’s Chamber of Commerce held a prominent seat at the table at a recent meeting between Vancouver & Gulf Island regional chambers and the B.C. government.
In total, 15 chambers met with 21 government representatives — including deputy ministers, and assistant deputy ministers across 11 ministries — to discuss both local and pan-provincial issues affecting businesses.
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Tammy Leslie, Ladysmith Chamber president presented three policy proposals to the provincial government. Leslie’s presentations made a case for the PST to be changed to a value added tax, an system to provide a fully refundable tax credit equal to the PST paid on business investment on machinery, equipment and other capital inputs, and a proposal to direct WorkSafe BC to refund overfunded surplus to employers.
Among all the policy proposals, Leslie — a charted professional accountant by trade — expressed particular passion in the proposal to do away with PST.
“The benefits to small business would be huge, because all the costs we’re putting out right now paying PST on everything we purchase… If we went to a value added tax, it’d be like GST, we could claim that cost back,” Leslie said.
The rate of PST is currently seven percent. Employers pay PST on everything except wages and insurance.
“Most provinces, and the rest of the world, use a value added tax system,” Leslie said. “Only ourselves, Manitoba and Saskatchewan use the old PST system.”
Leslie pointed to PST costs borne by forestry and construction industries on equipment purchases as an example of the benefits a value added system could bring.
In 2008, B.C. switched to a harmonized sales tax, (HST). HST combined GST and PST into a single tax rate of 13 percent. Instead of filing two separate returns for GST and PST, businesses only had to file one HST return. For small business, filing two different tax returns is a tedious task that takes up valuable business hours.
Ultimately, the HST fell out favor when consumers had to pay a flat tax of 13 percent on all goods and services, despite some items being exempt from either GST or PST. HST was removed following a referendum in 2013.
“When we were under the HST system, B.C. was the sixth most competitive province, and now we’re right at the bottom. We are the least competitive province tax wise,” Leslie said. “Small business is one of the biggest payers of the PST. We provide 54 percent of the private sector employment, 43 percent of goods exported from this province come from small business. We need the help.”
It’s not clear if the government will be receptive to Leslie’s message on PST, however, she said that the ministers were listening to concerns that chambers raised. These meetings between chambers and the provincial government are the first of their kind in B.C. One all the regional meetings are complete, the provincial government will assess results and determine whether they will continue to host these meetings in the future.
“It was very empowering. I not only spoke to them on a couple of key issues my members, and my personal clients are affected by, but I also brought forward stories from two of our chamber members in Ladysmith about how these things are affecting their business. I even had one of the people on the government side say she liked the stories I brought forward. I felt like we were being heard,” Leslie said.
Leslie encouraged small business owners in Ladysmith to come to the chamber with their concerns, so that more businesses have the opportunity to have their concerns heard by the provincial government.
“I feel like this is uncharted territory for the chamber… prior to this even the B.C. Chamber didn’t go directly to government officials. This was the first time we’ve ever done a face-to-face submission, they had to answer to us right then and there, which I found was more effective in many ways,” she said.