Finance Minister Gary Collins is leaving the door open on the future elimination of sales tax. But Prince George-North MLA Pat Bell is cautioning people not to hold their breath.
The province introduced its first balanced budget Tuesday, even projecting a $100-million surplus for the 2004/05 fiscal year. What will happen to that surplus – and any future surpluses – has not been decided yet.
“You saw the budget, you saw how razor thin it was, so I don’t think people should be expecting any significant tax decreases in the near future,” said Bell.
Bell did say there is “some merit” in current discussion around introducing a graduated provincial sales tax in border regions of the province.
Dawson Creek city councillor Alvin Stedel, chair of the graduated PST steering committee, requested Prince George’s support in the push to reduce the sales tax payable in border towns.
Cities such as Dawson Creek, Golden and Creston face a competitive disadvantage, said Stedel. Retailers must charge the B.C. sales tax rate of 7.5 per cent, while neighbouring Alberta has no provincial sales tax.
Stedel’s committee is proposing a pilot project that would peg the PST charged in border towns at a reduced rate of between four and five per cent.
“I think that I could support it, mainly because we don’t do a lot of retail from people in Dawson Creek and Fort St. John and other parts of the Peace,” said Prince George Mayor Colin Kinsley.
Bell also suggested the idea is worth looking at. The provincial government is involved in the process, he said. “The question is, how would you draw lines?” he said.
“At the end of the day, there’s probably more revenue that would come back to provincial coffers if we had some sort of a graduated process. But everyone would argue that they want the line one side or the other, depending on where they live.”
The pilot project would rely on research that indicates the greatest impact of cross-border shopping is within a two-hour drive of the border, said Stedel.
The recommended boundary for the project would use existing shopping patterns and natural geography, such as the Pine Pass northeast of Mackenzie, for instance.
The boundary would take in all of the Peace River, Northern Rockies and East Kootenay regional districts, as well as the Creston and Golden areas.