In a June 10, 2011 news release, the province of British Columbia confirmed its commitment to reduce the provincial component of the HST from 7 per cent to 5 per cent in two stages by July 1, 2014. The federal government has given support to this commitment by issuing an Order-in-Council that makes this two stage British Columbia HST rate decrease the effect of law, by including it in the regulations to the Excise Tax Act.
As a result, subject to a “No” vote in the HST referendum, the province of British Columbia will keep the HST, but reduce the current rate from 12 per cent to 11 per cent, effective July 1, 2012, followed by a subsequent 1 per cent rate reduction on July 1, 2014, resulting in a 10 per cent HST rate. If British Columbians vote “Yes” in the upcoming referendum, the province will completely abolish the HST, and reinstate the old PST and GST sales tax rates.
British Columbia’s Finance Minister Kevin Falcon is confident “British Columbians will agree that a 10 per cent tax rate is better for B.C. families than the old 12 per cent two-tax PST and GST system and will vote “No” in the referendum”. In appreciation for a “No” vote, British Columbian families with children will receive a one-time transitional payment of $175 per child under 18 years of age. In addition, low- and modest-income seniors will receive a one-time transition payment of $175.