SURREY (NEWS1130) – Surrey’s mayor says the transition back to the Provincial Sales Tax will cost her city millions and she wants the province to help make up the difference.
“Anything that started with the HST program that’s now going back to the PST, there’s now an implication on the funds that need to be paid,” Dianne Watts tells News1130.
“For instance, we’re building two new pools and the impact on that will be an extra $2.5 million for Provincial Sales Tax.”
A report by city staff says nearly all materials and equipment used in construction projects are subject to the seven per cent PST, but they were exempt under the HST system. When council budgeted for capital projects, such as the pools, it didn’t consider those extra costs.
“So, we’re asking for a program to be set up to reimburse local governments the amount of the provincial sales tax that wouldn’t have been paid under the HST system so that local governments aren’t challenged within the budget system,” explains Watts.
“Our only source of revenue is through property tax,” she points out.
Watts says there was an exemption program in place before the BC government made the original switch from the PST to the HST. She plans on writing to the finance minister in an effort to bring those old exemptions back.
She also wants to bring up the issue at the Union of BC Municipalities convention later this month.