The provincial Ministry of Finance clarified Thursday that the proposed 0.5 per cent “Congestion Improvement Tax” will apply to everything that the Provincial Sales Tax does.
That’s not welcome news for Jeff Guignard, executive director of the Alliance of Beverage Licensees of British Columbia, who says his industry should be exempt from the new tax, if it’s approved in the Metro Vancouver transit referendum in a few weeks.
“We were hoping that it would be exempt,” Guignard said. “Liquor sales already have an additional 10 per cent sales tax on top of it, so adding another half per cent is just unfair to the industry.”
The car industry was also hoping to be exempt from the new tax. Blair Qualey, president and CEO of the New Car Dealers Association of B.C., told CTV News earlier this month that dealers are concerned that customers will buy their new vehicles outside of Metro Vancouver to avoid the extra taxes.
On a $40,000 vehicle, a 0.5 per cent sales tax would equate to an extra $200 in costs for the customer.
“If you’re here in Langley, it’s not that far down the road to save $200,” Qualey said at the time.
Both industries say they’ve been trying to get the provincial government to clarify what the new tax would apply to for months.
On Thursday, the Ministry of Finance told CTV News “the tax is intended to match the PST as closely as possible.”
The price of alcohol in B.C. is already high compared to other provinces, Guignard said. The minimum price per ounce for beer under new provincial happy hour laws, for example, is 25 cents, compared to an average of 16 cents elsewhere in Canada, he said.
Between higher base prices and alcohol-specific taxes, Guignard believes his industry is already paying “more than our fair share.”
He said the government hasn’t been particularly receptive to his concerns so far.
“We’ve not had the best experience,” he said. “We asked a couple of weeks ago for information that was announced today through the media. It would have been nice to get a clear answer back when we first asked the question.”
Now that he knows definitively that alcohol is included, he plans to contact the government again to make the case for an exemption, but he said he’s not particularly optimistic
The ministry told CTV News that it’s still working on the design of the tax and its implementation. If the tax is approved by voters, the ministry expects it will be administered by the province, alongside the existing PST.
