Well, it’s been nearly two weeks since the HST kicked in, and I thought I’d summarize some of the benefits:
- camping fees went up from $24 to $30 at Cultus Lake
- Gas went up about 5 cents per litre in Chilliwack
- Carbon tax on fuel went up 1.12 cents/litre
- the local Pharmacy started charging for all bags on July 1st
- a can of soda went from $1.05 to $1.15 at my favourite coffee shop
- BC Hydro’s Rate Rider was silently raised from one to four percent
Clearly this tax is on its way to causing prices to drop on consumer goods in BC.
My hair styler’s (cutter?) price went up from $18 to $24. Screw that.
Physio went from $53 to $56
Caf at work went from $7 to $7.50
Sports massage therapy clinic I used to go went from $90 to $100!!!
Clearly this new tax is going to save me money!
I noticed that my bottle deposit went from $0.05 to $0.07 đ Why am I being charged tax on a bottle deposit? I do believe I only get $0.05 back and not the $0.07 I was charged…
I’m very confused about what’s going on here. The HST applies to everything the GST applies to, so the only items that should have increased in price are those that are PST-exempt, such as eating out – an increase of 7%. Even if something were completely untaxed before, it would only be 12%.
Still, people are pointing to a lot of things that have increased far more than 12%. Camping fees going from $24 to $30 is a 20% increase. Hair styling from $18 to $24 is a 25% increase. Sports therapy from $90 to $100 is an 11% increase.
No one ever said HST was going to make everything cheaper instantly; it might take a year or two before the benefits have completely filtered down to the average person. Still, it sounds to me like a lot of businesses increased their prices on the 1st of July so that people will (erroneously) think that it’s a result of the HST.
Sure, some things are more expensive under the HST, and that sucks, but I don’t see how you can blame the HST for a 25% increase in hair styling or a 20% increase in camping fees.
It just points to a failure in the implementation of this tax or in trickle down economics. Yes, the HST should only result is a 12% increase. But if companies are raising their prices more because they are confused about HST or are concerned they won’t get it back on input credits, the net effect is still a price increase for the consumer, which is a result of the HST and it’s shoddy rollout. As I pointed out, the government and crown corporations are using the HST to hide a few other price increases, most notably in the areas of liquor, carbon and adjustments such as the Rate Rider for BC Hydro. Whether you want to blame the HST or not is up to you, but given how all these price increases were scheduled for July 1st, I don’t think it’s a coincidence that it’s related to the rollout of HST – obviously not a direct result, but an indirect consequence of the new tax system.
Prices rarely go down due to price-stickyness and obviously inflation. Do you honestly think the prices of any of these goods or services are going to go down as a result of the HST? I sure don’t.
I guess the real point I’m making is that whatever you might feel about the HST, you can’t blame the government for the profiteering of others. It sucks when crown corporations do it, but they’re still corporations with separate decision making. They’re owned by, but not run by, the government.
Small businesses (like the hairstylist or physio) have a lot more to answer for, in my mind, as it’s obvious price gouging, timed specifically to make people look elsewhere.
People seem to forget that this isn’t the invention of the HST. The HST has existed in the maritimes for years, and it’s turned out to be a good thing there. It saves the provinces time and money and makes things easier for businesses, which makes it easier for small businesses to survive.
One thing people don’t seem to understand is how complex the PST was. Many companies and corporations would have to hire outside consultants to determine how exactly the PST affected their business, how much to pay, and when and how. It was expensive, convoluted, and cumbersome, and took time and money that businesses (especially small, local businesses) rarely have enough of. Now, those small businesses can simply everything. Everything they sell is taxable or not, and they remit all taxes to the federal government. It’s very straightforward.
On top of that, those businesses no longer have to pay PST themselves to the businesses they deal with – which don’t have to pay PST to the businesses they deal with, and so on.
In reality, most goods and services are the same price, or at least, most of the money people spent remains unchanged. Hair styling costs (7%) more, but you don’t do that as often (monthly?). Books and groceries remain the same, and people buy those daily or weekly. New homes over a certain amount are taxed (but come with a tax rebate); previously-owned homes are not. Eating out costs marginally more, but if the extra 7% is really an issue it’s easily resolved by not eating out as much, or by accepting that 7% is really not that huge of a change, especially if businesses in turn start to save money as a result and can afford to their prices. And yes, they will – they’ll have to to stay competitive. All it takes is one store to lower their prices, and everyone else will have to follow along.
In the end, people should barely be paying more now than they did before (except those who eat out frequently, for example). If you’re paying a significant amount more now, it’s not a result of the HST, it’s just smoke and mirrors on the part of retailers. I’d suggest taking your business elsewhere.
I am blaming my hair cutter because that is exactly why she told me the prices went up. I am poor as all heck, and though I have had her for 4 years I fear I may look for another.
I still can’t get over HST on “Environmental fee” for electronics. It’s essentially tax on tax. Geez.. even fast food is more expensive now.
Could be worse. Look at the UK! Citizens who demand more social services and Nationalized healthcare must be prepared to pay through the nose in taxes.
Value added tax
The third largest source of government revenues is value added tax (VAT), charged at 17.5% (due to increase to 20% in January 2011) on supplies of goods and services. It is therefore a tax on consumer expenditure.
Certain goods and services are exempt from VAT, and others are subject to VAT at a lower rate of 5% (the reduced rate, such as domestic gas supplies) or 0% (“zero-rated”, such as most food and children’s clothing).[23] Exemptions are intended to relieve the tax burden on essentials while placing the full tax on luxuries, but disputes based on fine distinctions arise, such as the notorious “Jaffa Cake Case” which hinged on whether Jaffa Cakes were classed as (zero-rated) cakesâas was eventually decidedâor (fully-taxed) chocolate-covered biscuits. Until 2001, VAT was charged at the full rate on sanitary towels. [24]
On the 22nd June 2010, Chancellor George Osborne announced that from 4th January 2011 the UK VAT standard rate will increase from 17.5% to 20%.