Pulp mills like Harmac near Nanaimo would benefit from a break on their substantial power bills.

BC BUDGET: PST relief proposed for business electricity bills

Sales tax on power bills not only hits business, it's also charged on hospitals, schools and municipalities

Finance Minister Mike de Jong has accepted the advice of a business advisory group, proposing to take the provincial sales tax off business electricity bills over the next two years.

In his pre-election budget Tuesday, de Jong announced a plan to cut the PST on electricity in half effective Oct. 1, from seven per cent to 3.5. The rest would be removed in April 1, 2019.

Residential and farm power bills are already exempt from PST. Municipalities, hospitals and schools pay PST on their electricity purchases and would benefit from the change.

De Jong set up a Commission on Tax Competitiveness last year, and it identified B.C. as the only jurisdiction in North America that applies sales tax to electricity bills.

In January, mayors of North Cowichan, Quesnel, Vernon, Port Alberni, Mackenzie, Powell River, Taylor and Port Alice wrote to de Jong asking for the measure to assist struggling sawmills and pulp mills.

“It’s good news for the pulp and paper industry, good news for our workers and communities,” said Len Posyniak, senior vice president of Catalyst Paper. “We’re BC Hydro’s largest industrial user, and we make up about five per cent of the load.”

The province currently takes in about $164 million a year from the tax. The finance ministry estimates that the elimination would save small and medium-sized businesses about $50 million a year.

The budget also proposes to reduce the small business income tax rate by half a point to two per cent. De Jong said that puts B.C’s small business tax at the second lowest rate in Canada, behind Manitoba which has no income tax on small business.

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Back in play: Columbia Shuswap Regional District reopening playgrounds

Signs with reminders about COVID-19 regulations will be posted

RCMP seek to identify person of interest in Salmon Arm arson investigation

Police believe a June 4 residential garage fire was deliberately set

Salmon Arm demonstrators show unity with Black Lives Matter movement

Participants speak out against systemic racism and targeting of vulnerable populations

Revelstoke, North Okanagan RCMP team up to nab Alberta man, stolen BMW

Helicopter, dogs used in North Okanagan highway arrest

Salmon Arm West bridge construction expected to begin in fall 2020

Budget for Highway 1 project up $20 million over intial 2016 estimate

MAP: Dr. Henry reveals which B.C. regions have seen most COVID-19 cases

B.C. health officials release a first look at how the novel coronavirus has reached all corners of the province

Limit gun capacity to five bullets, victims group urges Trudeau government

Current limits are generally five bullets for hunting rifles and shotguns and 10 for handguns.

Vancouver Island’s current COVID-19 case count officially hits zero

Of the 130 recorded Island Health cases, five people have died, 125 recovered

COVID-19: Closed B.C. businesses allowed to sell liquor stock

Sales allowed to other licensees that can reopen

Trudeau to offer premiers billions to help reopen the economy safely

Making a difference in municipalities is a pricey proposition

Vancouver Island First Nations gather to remember woman fatally shot by police

Nuu-chah-nulth Tribal Council requests an independent investigation

Penticton Search and Rescue respond to six calls in less than a week

Two hikers rescued in early morning search near Greyback Lake latest in series of searches

Regional District of Kootenay Boundary rescinds all Grand Forks-area evacuation orders

Evacuation alerts for 1,136 Boundary properties remain in effect as officials monitor forecasts

In photos: Modified, yet traditional graduation gives Penticton graduates a sense of normalcy

Students around Penticton take part in pre-recorded graduation ceremonies

Most Read