The British Columbia Minister of Finance, Kevin Falcon, has announced that the province has proposed to reduce the total HST rate to 10 percent in two stages, in keeping with the province’s goal to better the lives of families in the province, while ensuring the government meets its commitment to balanced budgets.
The provincial component of HST is proposed to decrease to six percent from the current seven percent, effective July 1, 2012. A further one percent reduction in the provincial component of HST to five percent would take effect on July 1, 2014.
With these proposed reductions of the provincial component of HST, it is estimated that the average British Columbian family will pay less tax under a 10 percent HST than reverting to a PST and GST system. In order to help offset the incremental costs of the HST prior to the proposed rate reductions, the province will issue one-time transition cheques to families with children under the age of 18 of $175 per child. In addition, low and modest income seniors will receive a one-time transition cheque of $175. This transition program is expected to cost $200 million and transition cheques would be issued by the end of the year.
Please note that these proposed changes to the HST will only take effect should British Columbians vote to keep the HST in the upcoming referendum on June 24, 2011.
For more information about British Columbia HST, visit: www.hstinbc.ca