B.C. Liberal leader Andrew Wilkinson speaks in the legislature, Feb. 26, 2020. (Hansard TV)

$5 billion fall tax bill too much for B.C. business, NDP told

PST, employer health tax, hotel tax may come due Sept. 30

B.C.’s budget deficit is currently pegged at a record $12.5 billion, as the NDP government faces the beginning of a wave of business closures due to the COVID-19.

That’s four times the size of the last big deficit in 2012, when the B.C. Liberal government had to buy its way out of a rejected harmonized sales tax deal with Ottawa. And current B.C. Liberal leader Andrew Wilkinson has repeatedly proposed bringing it up to $15 billion, by forgiving the first 90 days of deferred taxes that Finance Minister Carole James has set for repayment by the end of September.

Collected but not remitted sales and hotel taxes, along with the government’s new employer health tax on payrolls, will total about $5 billion by fall, Wilkinson told the B.C. legislature July 15. Businesses who have been “running on fumes” for four months aren’t going to be able to repay it, he said.

James kept the door open to extending the repayment deadline, but has not commented on granting the tax holiday that Wilkinson has argued for in a series of letters to Premier John Horgan. The repayment schedule will be reviewed “well before we get to Sept. 30,” James said in question period.

“I’m afraid that kind of answer will be cold comfort to the thousands of businesses that are facing huge tax-deferred bills coming due this September, for which the minister refuses to provide an answer,” replied Abbotsford West MLA Mike de Jong, who preceded James as finance minister. “Families are facing work uncertainty or outright unemployment.”

RELATED: B.C. moves to allow three years of budget deficits

RELATED: B.C.’s potential deficit $12.5 billion as spending soars

The Business Council of B.C. has not endorsed the idea of a tax holiday, but it is calling for an extension of the payment deadline through 2020 and a staged repayment plan that could extend to the end of 2021.

“With a very slow economic recovery and the enormous damage inflicted on many economic sectors by the virus and the measures taken to contain it, we believe there is a strong argument for extending the 2020 tax deferrals until the end of the year,” BCBC chief policy officer Jock Finlayson told Black Press Media July 16. “We are not recommending an extension beyond that point.”

With an uncertain future for the COVID-19 pandemic, which has plunged B.C. government revenues as spending has ramped up, accumulated debt is also a key factor.

“From an accounting perspective, the government is not ‘losing revenue’ with tax deferrals,” Finlayson said. “ Rather, it receives the money due with a delay. The only cost to the treasury is the interest paid on the extra short-term debt – which today is substantially less than one per cent. So there is very little impact on the size of the deficit.”


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislatureCoronavirus

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

Just Posted

Province, feds, Wet’suwet’en announce progress in MOU talks

Community engagement process launched to implement northern B.C. First Nation’s rights and title

Dogs are matched with the person, not the person matched to the dog – Prince Rupert SPCA

Prince Rupert SPCA does their due diligence in adopting dogs to suitable human companions

Photo Gallery: Memorial totem pole raising in Prince Rupert

The memorial pole stands in memory of Prince Rupert carvers mother on Second Ave. West

Province, feds, Wet’suwet’en announce progress in MOU talks

External community engagement process launched to help implement Wet’suwet’en rights and title

Memorial totem pole raised in Prince Rupert

The memorial pole was a two year project led by local carver Lyle Campbell

STANDING TALL: Forestry workers meet the challenges, remain hopeful

A look at the forest sector in B.C. – and those hoping for the best – amid mill curtailments

Man suffers serious injuries in bear attack in remote area near Lillooet

It was deemed a defensive attack, no efforts were made to locate the animal

Parkinson SuperWalk goes virtual throughout B.C. due to COVID-19

People encouraged to walk around their neighbourhood, along community trails, through parks, forests

Missed rent payments because of COVID-19? You have until July 2021 to pay up

Each monthly instalment must be paid on the same date the rent is due

U.S.-Canada pandemic border restrictions extended into September

‘We will continue to keep our communities safe,’ says Public Safety Minister Bill Blair

578 British Columbians currently infected with COVID-19

Seventy-eight new cases confirmed in past 24 hours

WE Charity registers as lobbyist, lays off staff, looking to sell real estate

WE Charity said its financial position has been greatly affected by the COVID-19 pandemic

Conservation seizes fawn illegally kept captive in Vancouver Island home

A Comox Valley resident charged and fined under the Wildlife Act

Pandemic could be driving more parents to get on board with flu shot: study

University of B.C. study gauges willingness for parents to vaccinate children for influenza

Most Read