As committed, the PST is being re-implemented with all permanent exemptions. The government also introduced common-sense improvements that will make administration of the sales tax easier for businesses.
Consumers will pay PST only on those goods and services that were subject to the tax before July 1, 2010. Consumers will again not pay PST on purchases like food, restaurant meals, bicycles, gym memberships, movie tickets, and others, nor for personal services like haircuts.
For businesses, the new legislation is clearer and easier to administer. The original provincial sales tax act was introduced in the 1940s, and countless changes were introduced over the years as adjustments were needed. That approach created a complex and convoluted tax landscape for businesses trying to comply with the tax.
The new act will bring changes together in one statute that will be easier to follow, helping simplify business compliance and reduce costs. Improvements reflect recommendations from the business community and the Expert Panel on Business Taxation established in January.
New measures to improve the PST include:
The Province also updated the Taxpayer Fairness and Service Code, first introduced in 2005.
The updated Taxpayer Fairness and Service Code reaffirms the government's commitment to fairness and service values, and affirms taxpayers' right to courtesy, respect, confidentiality, fair treatment, help, information, dispute resolution and timely appeals.
Over the coming months, further work on regulations to fully establish the exemptions will continue and will consider the input received from business to ensure clarity. Additional consequential and transitional amendments will also be required before April 1, 2013. The Province intends to publically release a final proposed version of the legislation as early as this fall to support business outreach and awareness.
By October 2012, government will begin outreach seminars to train businesses on how the PST applies, and business registration using the new online system will begin in January 2013.
As previously announced, the return to PST will also see:
Quotes:
Minister of Finance and Deputy Premier Kevin Falcon -
"As promised, on April 1, 2013, consumers will only pay PST on those goods and services that were subject to PST before the implementation of the HST. All permanent PST exemptions will be re-implemented, and consumers will not pay PST on food, bicycles, memberships, or personal services like haircuts and more."
"The Taxpayer Fairness and Service Code demonstrates that this government is committed to taxpayer rights, fair dispute resolution and timely appeals. With the reintroduction of the PST, we are refreshing the code and affirming our continuing commitment to fairness and service to taxpayers."
Two backgrounders follow:
For more information about these measures:
Visit: www.pstinbc.ca
For B.C. tax questions, call 1 877 388-4440
Email: CTBtaxquestions@gov.bc.ca
Media Contact:
Janet Stewart
Communications Manager
Ministry of Finance
250 356-9872
BACKGROUNDER 1
Return to PST progress update
The return to a PST and GST system in British Columbia is a very complex process and requires careful planning, co-ordination and implementation through its various stages to ensure an orderly transition.
PST re-implementation timeline
The Province's action plan to return to the PST announced Aug. 26, 2011, is on track to return to the PST with all permanent exemptions on April 1, 2013.
Provincial Legislation/Regulations
The Province has introduced legislation to meet its commitment to return to the PST. The legislation has clarified language to reduce ambiguity and bring the old legislation up to date with current practices and technology. A number of the changes reflect recommendations from the Expert Panel on Business Taxation: http://www.fin.gov.bc.ca/experts_panel_tax.htm
Over the coming months, the Ministry of Finance will work on drafting regulations to support the provisions in the legislation. Additional consequential and transitional amendments will also be made before April 1, 2013. The Province intends to publically release a final proposed version of the legislation as early as this fall to support business outreach and awareness.
Provincial Systems Development and Administration
The Province is finalizing its arrangements with the Canada Revenue Agency on staffing. Progress continues on establishing facilities and upgrading software to allow for enhanced functionality. Updated legislation, new software, e-service, and streamlined administration mean that fewer staff are expected to be required to administer the PST, saving B.C. taxpayers money.
Provincial Business Registration and Outreach
Business outreach seminars, beginning in October, will explain how the PST applies. Registration of approximately 100,000 businesses using a new online system will begin in January 2013. Businesses will benefit from new e-services such as online registration, remittance, and self service options.
Business Transition
As businesses receive information from the Province on the new PST, they will need to adapt their systems. Provincial programs to help business understand their responsibilities in administering the PST are under development.
Progress Reports
Information on the return to PST and quarterly progress updates are available at: www.pstinbc.ca
Timeline
Media Contact:
Janet Stewart
Communications Manager
Ministry of Finance
250 356-9872
BACKGROUNDER 2
Taxpayer Fairness and Service Code: A B.C. Innovation
In 2005, the Province of B.C. partnered with small business organizations to create the Taxpayer Fairness and Service Code-a code that detailed a set of core values to guide government in dealing with the public and business owners.
The code was designed to improve communications so that problems were identified and resolved quickly or avoided altogether, resulting in less of a burden on taxpayers and more efficient revenue collection by the ministry.
The Taxpayer Fairness and Service Code was developed in partnership with the Chartered Accounts of B.C., the Canadian Federation of Independent Business, the B.C. Chamber of Commerce, the Retail Merchants' Association of B.C., the Retail Council of Canada, and the Sales Tax Practitioners' Liaison Committee.
The updated code unveiled today preserves a set of principles detailing customers' rights to courtesy, respect, and confidentiality in their dealings with the government, and commits to the following standards:
Media Contact:
Janet Stewart
Communications Manager
Ministry of Finance
250 356-9872
Bill 45, the Income Tax Amendment Act, 2012, introduces legislation for the B.C. First-Time New Home Buyers' Bonus and the B.C. Seniors' Home Renovation Tax Credit announced in Budget 2012.
First-time buyers of newly built homes may be eligible to receive the B.C. First-Time New Home Buyers' Bonus of up to $10,000 - giving families a break, while supporting the new-home construction sector. Individuals must apply for the bonus through the B.C. government. Bonus payments will be sent out as cheques in the mail.
A new B.C. Seniors' Home Renovation Tax Credit of up to $1,000 annually will be available to help with the cost of permanent home renovations that provide British Columbians aged 65 and over with increased independence, allowing them the flexibility to remain in their own homes longer. It will be available to individuals who incur eligible expenditures on or after April 1, 2012.
The credit can be claimed by seniors, whether they own their home or rent, and by individuals who share a home with a senior, when individuals file their personal income tax returns for 2012, and future years.
Quotes:
Finance Minister Kevin Falcon -
"This new legislation gives consumers a break by helping families with the cost of buying a new home and assisting seniors with some home renovation expenses that assists them to stay in their home longer."
"These measures that benefit qualifying families and seniors will also help to protect and create jobs by supporting the home construction and renovation industry. I hope families looking for a new home and seniors considering permanent home renovations will take advantage of these opportunities."
Learn More:
B.C. First-Time New Home Buyers' Bonus -
Information on the B.C. First-Time New Home Buyers' Bonus, as well as the application form, can be found online at: http://www.sbr.gov.bc.ca/individuals/Income_Taxes/Personal_Income_Tax/tax_credits/fthb_bonus.htm
The bonus is a temporary measure, effective until March 31, 2013.
B.C. Seniors' Home Renovation Tax Credit -
Information on the B.C. Seniors' Home Renovation Tax Credit can be found online at: http://www.sbr.gov.bc.ca/individuals/Income_Taxes/Personal_Income_Tax/tax_credits/seniors_home_reno.htm
Contact information:
For more information or to find out if you qualify, please call or email:
* Telephone: 250 387-3332 or 1 877 387-3332
* Email: ITBTaxQuestions@gov.bc.ca
Media Contact:
Jamie Edwardson
Director of Communications
Ministry of Finance
250 356-2821
Connect with the Province of B.C. at: www.gov.bc.ca/connect
]]>Bill 38 brings improvements to pension legislation by reducing administrative costs and will enhance the rights of pension plan members, including immediate entitlement to employer-paid contributions and more information about how a plan is operating. The bill will extend the same right to receive plan information to retired members.
In addition, it establishes a framework that will give former pension plan members the option of withdrawing "locked-in" funds in a Registered Retirement Savings Plan or life income fund in cases of financial hardship.
The changes permit innovative alternatives to existing plans, such as jointly sponsored cost-sharing pension plans and target benefit plans. Under the jointly sponsored cost-sharing plan model, similar to what currently exists in public-sector pension plans, employers and employees would contribute equally to all elements of the pension plan.
Other key amendments include requiring governance and funding policies for defined benefit and target benefit plans.
This bill provides the superintendent of pensions, the Province's pension regulator, with new tools, including the power to levy administrative penalties and appoint replacement administrators or actuaries.
Other key amendments include requiring governance and funding policies for defined benefit and target benefit plans.
The changes will also ensure that legislative support exists for the regulation of pension plans that have members located in more than one province.
Quotes:
Minister of Finance Kevin Falcon -
"Pensions are the cornerstone of a family's retirement savings. The new plan design options such as target benefit plans, and improved pension plan disclosure requirements, will help to ensure British Columbian's retirement savings options are maximized."
"Employers have said they need streamlined regulation so that they can focus on their business and not on red tape. Modernizing the legislation gives employers more flexibility to offer a wider choice of pension plan options, so that more British Columbians can have access to pension income during their retirement years."
Contact:
Jamie Edwardson
Director of Communications
Ministry of Finance
250 356-2821
The agreements ratified by the PSEA board cover:
* Douglas College and the Douglas College Faculty Association.
* North Island College and the North Island College Faculty Association.
* Okanagan College and the BCGEU Local 707 Vocational Instructors.
* Selkirk College and the BCGEU Local 709 Vocational Instructors.
* Selkirk College and the Selkirk College Faculty Association.
The five settlements cover approximately 1,800 faculty and vocational instructors working at four public post-secondary institutions throughout the province. Following local ratification by the parties, the PSEA board ratifies each two-year agreement, which contains items that were agreed to at the PSEA common table in December 2011.
Collective agreements that expired in 2010 and 2011 continue to be reached under the 2010 net-zero mandate, even as a number of public sector employers and unions in the public service, health and community social service sectors have begun negotiations under the 2012 Cooperative Gains Mandate.
Quotes:
Minister of Finance Kevin Falcon -
"These agreements are among the last to be negotiated under the 2010 net-zero mandate, as almost three-quarters of the collective agreements have been successfully renegotiated."
"We have been clear that there is no new money to fund wage increases and no desire to download these costs onto families or future generations. Under the 2012 Cooperative Gains Mandate, public sector employers have the flexibility to negotiate modest compensation increases if they can find equivalent savings within their existing budgets."
Minister of Advanced Education Naomi Yamamoto -
"I'm pleased to hear that these agreements are in place for the benefit of the faculty, the instructors and the students they teach."
Quick Facts:
* There are about 300,000 unionized workers employed in the public service, at Crown corporations and agencies, and in the K-12, post-secondary, health and community social services sectors.
* Public sector wages account for more than half of total government spending.
* An increase of one per cent in total compensation for all unionized public sector employees would cost the Province approximately $196 million each year. If applied to non-union and management groups, this increases to about $237 million annually.
Learn More:
Updated bargaining information is available at: http://www.fin.gov.bc.ca/psec/
Media Contacts:
Government Communications and Public Engagement
Ministry of Finance
250 356-2821
Joanne Whittier
Communications Manager
Ministry of Advanced Education
250 952-6400
Connect with the Province of B.C. at: www.gov.bc.ca/connect
]]>The move follows Finance Minister Kevin Falcon's annual investor tour, which saw investors buy more than $275 million in B.C. bonds after hearing about B.C.'s fiscal and economic position.
B.C.'s US-dollar global five-year bond was well over-subscribed amid strong demand from European, US and Asian investors, with an order book of more than US$2 billion. The Province expects it could save up to $3 million compared to its domestic cost of borrowing. The strong reception affirmed the high value accorded the Province's credit strength and reputation in the capital markets.
B.C. bond yields are currently about 30 basis points below the Province of Ontario in the US-dollar market, showing the market considers B.C. bonds to be a secure long-term investment.
Falcon conducted four days of post-budget meetings with investors in New York, Montreal, Toronto and Chicago, April 10-13, to discuss B.C.'s strengths as a safe harbour for investment, including a track record of fiscal discipline, a newly affirmed triple-A credit rating from North America's two major agencies, competitive tax rates and B.C.'s shifting trade mix toward Asia.
B.C. also issued two privately placed notes for a total of $210 million to a single domestic investor following the provincial presentation. Separately, a US investor who had attended the minister's presentation purchased approximately USD$65 million of the Province's available bonds in the secondary market. Strong demand for B.C. bonds in the secondary market helps keep the Province's costs of borrowing down.
The Province broadened its investor outreach this year by adding presentations to investors in Chicago, Illinois, who have participated in the Province's bond program and showed interest in new offerings from B.C.
British Columbia is one of the few provinces able to borrow offshore a cost below its domestic cost of funds - primarily due to its stable triple-A credit rating. Access to international markets increases the number of potential buyers and helps keep B.C. debt costs low. The Province saved an estimated $11 million in interest costs last year by selling the equivalent of C$2.3 billion of debt in the international, rather than the domestic, market.
Quotes:
Minister of Finance and Deputy Premier Kevin Falcon -
"My meetings with national and international investors this past week once again underlined that now more than ever, governments that manage their finances well are rewarded and those that don't are penalized. That is why our government remains committed to balancing the provincial budget in 2013-14 through continued fiscal discipline."
"Investors are impressed when I tell the B.C. story: how we have maintained fiscal discipline, reduced personal and business tax rates, exceeded our budget targets in nine out of the past 10 years, and earned back triple-A ratings - and held them in spite of the worldwide economic downturn. They recognize that B.C. is that important safe harbour for their investments."
Quick Facts:
Learn More:
News release - April 12, 2012: AAA ratings confirm B.C.'s solid fiscal plan is working:
http://www2.news.gov.bc.ca/news_releases_2009-2013/2012FIN0022-000460.htm
Investor presentation: http://www.fin.gov.bc.ca/PT/dmb/investpres.htm
Media Contact:
Jamie Edwardson
Director of Communications
Ministry of Finance
250 356-2821
Negotiated agreements were reached through collaborative discussions between the BCPSEA, the accredited bargaining agent for the province's 60 public boards of education, and union bargaining teams representing K-to-12 support staff. The collective agreements were ratified at the local level in December 2011 and are now being announced as the remaining groups receive final ratification by the BCPSEA board.
The 12 most recent settlements under the provincial framework agreement cover approximately 8,300 employees working in school districts in British Columbia:
Although outstanding agreements are still being negotiated with unions under the 2010 mandate, virtually all of B.C.'s public-sector collective agreements covered by the 2010 mandate are now settled for two years of net-zero.
Agreements expiring in 2012 will be negotiated under the Cooperative Gains Mandate. Government has been clear that there is no new money to fund wage increases and it will not download those costs onto families or future generations. The new mandate gives public-sector employers the ability to look for operational savings that may be applied to modest wage increases, as long as services are maintained and costs are held to existing budgets.
There are approximately 300,000 unionized workers employed in the public service, at Crown corporations and agencies, and in the K-12, post-secondary, health and community social services sectors. An increase of one per cent in total compensation for all unionized public sector employees would cost the Province approximately $196 million each year. If applied to non-union and management groups, the cost increases to about $237 million annually.
Learn More:
Updated bargaining information is available at: http://www.fin.gov.bc.ca/psec/
Media Contacts:
Ministry of Finance
Government Communications and Public Engagement
250 356-2821
Ministry of Education
Government Communications and Public Engagement
250 356-5963
There's an important story to tell about B.C.'s record of fiscal prudence that often gets lost in the daily political coverage. In a world filled with "who's up and who's down", we need a clear perspective on what we've accomplished and how we measure up in the global economy.
I've just come back from meetings in North America's financial centres. When I tell the B.C. story, investors are impressed by the turnaround in B.C.'s economy and provincial finances since 2001, and how that turnaround has helped us navigate the recent global economic turbulence.
This history is backed up by major credit rating agencies, which have just reported their annual assessments of B.C.'s performance and outlook. All three major agencies affirmed their credit ratings for the Province of B.C., including triple-A ratings-the highest possible-from Standard & Poor's and Moody's Investors Services.
At a time when governments around the world struggle with massive debt and deficits and are earning credit downgrades, B.C. stands out with a record of exceeding our budget targets in 10 out of 11 years.
The rating agencies cited B.C.'s record of fiscal discipline, coupled with one of the most competitive tax rates for residents and businesses in Canada, and the province's shifting trade mix toward Asia rather than North America, as strengths of B.C.'s fiscal and economic performance.
Sometimes we forget that for many years British Columbia didn't have a strong credit rating. When we formed government in 2001, B.C. had just finished one of the worst decades of fiscal management, had received multiple downgrades, and was one of the least competitive provinces with high taxes and regulation.
We were elected to fix our economic situation, and we did. Our strong fiscal management received outside validation, and by November 2004 B.C. had received the first of seven credit rating upgrades.
Why should that matter to you? Because our triple-A credit rating saves taxpayers millions of dollars a year in government borrowing costs. Every dollar we don't pay in interest is one we can invest in public services or in paying down debt.
A triple-A rating also sends a powerful message to investors looking for stability and certainty in an uncertain world. New investment is key to protecting and creating jobs in every region of the province, which in turn supports the public services British Columbians want.
How did we earn a triple-A credit rating? Just like any B.C. family would for its own finances, we focused on the fundamentals: reducing spending and paying down debt. We also looked at how we could best keep companies and investment in B.C.
We reduced the general corporate income tax rate five times, for a total reduction of almost 40 per cent since 2001. For small business owners and entrepreneurs we increased the small business threshold from $200,000 to $500,000. We reduced red tape by over 42 per cent to free up the private sector. For families, we reduced income taxes by 37 per cent. What's more, we did it while protecting investment in health care, education and social services. The economy recovered and benefitted from increased trade and natural resources. And we used revenues from a strong economy to pay down debt.
We also made strategic investments with partners in projects like the Pacific Gateway, that are paying off in diversified trade, stronger market connections, and jobs for British Columbians.
The benefit of those investments to our province's economy were underlined by Standard & Poor's this week, when they highlighted the benefit of B.C.'s role as Canada's gateway to Asia, giving our economy significant wealth and diversification, and shifting B.C.'s trade mix towards Asia to balance the effect of the slower North American economy.
Now more than ever, governments that manage their finances well are rewarded, and those that don't are penalized. This is why our government remains committed to balancing the provincial budget in 2013-14 through continued fiscal discipline.
We've earned our triple-A credit rating through years of hard work. British Columbians can be proud of what we've accomplished together.
]]>
The reports come in the wake of meetings held with the rating agencies and as Falcon is undertaking four days of annual post-budget meetings with investors in New York, Montreal, Toronto and Chicago, April 10-13.
These independent assessments are based on the Province's consistent track record of fiscal and economic management that have helped B.C.'s economy weather the global economic downturn and put the province on track to balance the budget in 2013-14.
B.C.'s track record of fiscal discipline, one of the most competitive tax rates for residents and businesses in Canada, and the province's shifting trade mix toward Asia rather than North America were all cited as strengths of B.C.'s fiscal and economic performance.
Observations from the rating agencies include:
Since November 2004, B.C. earned seven successive credit rating upgrades and has out-performed budget targets in 10 out of 11 years, and is committed and on-track to balance the budget in 2013-14.
Quote:
Minister of Finance Kevin Falcon
"These judgements by independent, international experts confirm the very positive response we are receiving in key financial markets in New York, Montreal and Toronto. By balancing the budget, paying down debt, and reducing taxes to benefit individuals and business, we're diversifying our economy and expanding trade with the Asia-Pacific.
"British Columbians should feel proud that their province stands out as a jurisdiction with economic stability and a strong competitive tax regime that will bring investment into our province. We've accomplished this while protecting investment in health care, education and social services.
"Our strong ratings send a powerful message to investors that we're a safe harbour and gives confidence in British Columbia's economy, helping attract new investment and create jobs."
More information:
http://www.standardandpoors.com
Media Contact:
Jamie Edwardson
Director of Communications
Ministry of Finance
250 356-2821
The contract expired April 30, 2010, and negotiations have been underway since the fall of 2010.
On March 21, 2012, BCGEU child-care service workers voted 88 per cent in favour of ratifying the agreement, which covers approximately 250 child-care staff working at five child-care centres located in the UBC community.
Quote:
Minister of Advanced Education Naomi Yamamoto -
"I congratulate the negotiators on this agreement for bringing certainty to the people providing child-care services to the UBC community."
Quick Facts:
Learn More:
Updated bargaining information is available at: http://www.pssg.gov.bc.ca/psec/
Media Contacts:
Government Communications and Public Engagement
Ministry of Finance
250 356-2821
Joanne Whittier
Communications Manager
Ministry of Advanced Education
250 952-6400
First-time buyers of newly built homes may also be eligible to receive the temporary B.C. First-Time New Home Buyers' Bonus of up to $10,000.
More information: www.pstinbc.ca/buying_goods/new-home-purchase-grant
These measures will also help to protect and create jobs by supporting the home construction and renovation industry.
For more information on these new measures, please visit: www.gov.bc.ca/fin/ and www.pstinbc.ca
For more information about these measures:
Visit: www.pstinbc.ca
For B.C. tax questions, call: 1 877 388-4440
Email: CTBtaxquestions@gov.bc.ca
Contact:
Jamie Edwardson
Communications Director
Ministry of Finance
250 356-2821
"It's hard for young families to get ahead," said Premier Christy Clark. "We're helping them to do that by making the cost of new homes a little bit more affordable for young families just getting started, while at the same time protecting and creating stable jobs in the home construction industry."
Newly built homes purchased as a primary residence are eligible for a provincial rebate of 71.43 per cent of the provincial portion of the HST to a maximum amount. For new homes where the HST becomes payable on or after April 1, 2012, the maximum rebate amount will increase to $42,500. Before April 1, 2012, the maximum rebate amount was $26,250.
First-time homebuyers of newly built homes may also be eligible to receive the B.C. First-Time New Home Buyers' Bonus of up to $10,000.
"The $10,000 bonus for first time homebuyers will enable those buying their first home to make that giant step," said Doug Wittal, president of the Canadian Home Builder's Association of B.C. and Kamloops builder. "Each new home built because of this bonus will create 3.8 person-years of employment and over $60,000 in spinoff spending, a true economic booster."
In addition, purchasers of newly constructed secondary vacation or recreational homes outside the Greater Vancouver and Capital regional districts may be eligible to claim a provincial grant of up to $42,500. The HST does not apply to resale housing.
The Province also announced the transition rules for returning to the PST. These can be found at the following website: http://www.pstinbc.ca/media/2012_housing_rules_FEB.pdf
Quick Facts:
For more information about these measures:
Email: CTBtaxquestions@gov.bc.ca
Contact:
Sara MacIntyre
Director of Communications
Office of the Premier
250 580-7701
The negotiated agreements were reached through collaborative discussions between the BCPSEA, the accredited bargaining agent for the province's 60 public boards of education and union bargaining teams representing K-to-12 support staff in December 2011. The collective agreements were ratified at the local level and will continue to be announced as they receive final ratification by the BCPSEA board over the next few weeks.
The nine most recent settlements under the provincial Framework Agreement cover approximately 4,700 employees working in school districts in British Columbia:
Although outstanding agreements are still being negotiated with unions under the 2010 mandate, virtually all of B.C.'s public-sector collective agreements covered by the 2010 mandate are now settled for two years of net-zero.
Agreements expiring in 2012 will be negotiated under the Cooperative Gains Mandate. Government has been clear that there is no new money to fund wage increases and it will not download those costs onto families or future generations. The new mandate gives public-sector employers the ability to look for operational savings that may be applied to modest wage increases as long as services are maintained and costs are held to existing budgets.
There are approximately 300,000 unionized workers employed in the public service, at Crown corporations and agencies, and in the K-12, post-secondary, health and community social services sectors. An increase of one per cent in total compensation for all unionized public-sector employees would cost the Province approximately $196 million each year. If applied to non-union and management groups, the cost increases to about $237 million annually.
Learn More:
Updated bargaining information is available at: http://www.pssg.gov.bc.ca/psec/
Media Contacts:
Government Communications and Public Engagement
Ministry of Finance
250 356-9872
Government Communications and Public Engagement
Ministry of Education
250 356-5963
"The B.C. Teachers Federation has mounted an illegal picket line outside several government buildings in Victoria and is encouraging unionized staff not to enter their workplaces.
"In government's view, this strike activity is illegal, and we will seek an injunction from the Labour Relations Board confirming our position today.
"We are encouraging all staff to come to work as normal. Managers are available to help staff enter the building if they feel intimidated by these disruptive tactics. However, normal pay policy applies, and staff who do not come to work will not be paid for the day.
"We are monitoring the situation closely to ensure that public service staff are not harassed or mistreated."
Contact:
Jamie Edwardson
Communications Director
Ministry of Finance
250 356-2821