HST to be good to Province of BC over coming decade

See below for a press release from the BC Finance Ministry on a report received today that says when the HST is implemented in BC, many billions of investment dollars will flow here as a result

Sales tax harmonization and corporate tax cuts will increase capital investment by $14.4 billion and result in a net increase of 141,000 jobs by the end of the coming decade according to a report released today by economist and tax expert Jack Mintz, announced Finance Minister Colin Hansen. “The Mintz report confirms that the HST, along with federal and provincial corporate tax rate reductions, will dramatically improve the competitiveness of B.C. businesses, both here at home, and abroad,” said Hansen.

“Sales tax harmonization is an essential step to encourage new investment, improve productivity and create jobs for British Columbians.” The report also notes that sales tax harmonization, independent of corporate tax cuts, will account for an $11.5-billion increase in capital investment and a net increase of 113,000 jobs by the end of the coming decade. By lowering the tax on new investment, the HST will encourage capital investment, make B.C.’s economy more tax competitive, and create new jobs and opportunities across the province. While some businesses may not benefit directly from sales tax reform, the significant increase in business activity resulting from the reform will help all sectors of the economy. “Without a doubt, British Columbia’s sales tax harmonization will be a game changer, promoting capital investment in the province and providing an opportunity for the private sector to create jobs and pay higher wages to workers,” said Dr. Jack Mintz.

“Tax reforms will have a profound effect on the economy with B.C. leaping toward fast becoming one of the most competitive jurisdictions in the world.” All industrial sectors in B.C. will benefit from sales tax harmonization and will see their effective tax rate on new investment drop by over a third, according to Mintz, while some will see reductions of over 40 per cent. Small businesses will also see substantial benefits with their effective tax rate on new investment declining by almost 60 per cent. The report concludes that by 2018 B.C. will have an internationally competitive marginal effective tax rate on capital – lower than Alberta, Ontario and the current average of 20 major industrialized and emerging economies including that of the United States, the United Kingdom, Australia, France, Germany, Italy, Japan and South Korea.

Widely published in the field of public economics, Mintz was appointed the Palmer chair in public policy at the University of Calgary in January 2008.

The report can be found online at www.gov.bc.ca/hst