Finance ministry receives report that recommends homeowner grant elimination

VICTORIA – Finance Minister Carole James has received a task force report that recommends eliminating British Columbia’s homeowner grant, taxing non-alcoholic drinks and introducing a value-added tax similar to the rejected harmonized sales tax.

James was not available for comment Thursday, but her ministry issued a background statement saying the return of the HST is not under consideration and neither is changing homeowner grants, the discount on property taxes for those who live in their home.

The ministry statement says it regularly receives reports from experts on public policy, but makes no mention of accepting the report’s recommendations, other than thanking the task force members.

Former B.C. New Democrat finance minister Paul Ramsey; Prof. Lindsay Tedds, at the University of Calgary School of Public Policy; and Prof. David Duff, a tax law expert at the Peter A. Allard School of Law at University of B.C., produced the report.

James formed the task force last fall to provide advice on how to eliminate medical services premiums in B.C. and replace the estimated $2 billion loss in annual revenues, but before receiving the report she introduced MSP reforms, including an employers health tax.

The task force report also recommends taxes on sugary drinks and increasing the income tax credit to ensure low-wage earners don’t end up losing the benefits of a boost to the minimum wage.

The report says moving towards a value-added tax in B.C. could be difficult, but tax credits and other initiatives could gain public acceptance.

“We recognize the difficulty with introducing a value-added tax in B.C. or undertaking any significant PST reform that is similar to a value-added tax, after the HST was rejected by the public in 2011,” the report says. “However, with appropriate low-income tax credit increases and base-broadening, we feel that the tax system could be made more progressive and fair in the context of changes that enhance business competitiveness.”

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