The Harmonized Sales Tax is now history in B.C., but along with the return of the Provincial Sales Tax on April 1 comes consumer confusion about what the effect will be on prices.
The resurrected PST will replace the HST, which was introduced on July 1, 2010 and rejected less than two years later by voters in a referendum.
Under the PST/GST system many items will go down in price, but CTV consumer reporter Lynda Steele has discovered some will not due to coincidental price hikes.
Here is a list of some items that will cost seven per cent less when the PST returns:
- Landscaping
- Veterinary services
- Housecleaning
- Dry cleaning
- Tailoring
- Home renovations
- Accounting
- Wedding planning
- Funeral services
- Over-the-counter drugs
- Newspaper and magazine subscriptions
- Domestic air, rail and bus travel originating in BC
Eating out at restaurants will also be seven per cent cheaper unless you order alcohol.
"The tax for alcohol is actually going up, so you'll be paying about 15 per cent on all alcohol purchases," said Matti Rikkinen, Yaletown L’Antipasto co-owner.
That's a three per cent increase on alcohol purchases under the PST. However, the same dinner for two with a bottle of wine will still be almost $3 cheaper post-HST.
There's no PST on parking anymore, but that doesn’t mean consumers will save. Monthly parking prices will go down by seven per cent, but if you pay by the hour you most likely won’t see any savings. Many lot operators charge a flat rate hourly and have decided not to pass along the tax savings to consumers for now.
PST doesn't apply to cab rides anymore, but the taxi industry just brought in rate increase of 1.9 per cent on March 31 – meaning you’ll save just five per cent on your cab rides.
Basic phone and cable bills will drop seven per cent, although Shaw is hiking its prices April 1 -- and calls it a mere coincidence.
And if you were waiting to buy a new home or condo thinking you would save money with the HST gone, you actually won’t be pocketing any savings if the home is under $850,000.
If 10 per cent of the home was built before April 1st, 2013 you'll have to pay a new two per cent transition tax. That will wipe out any savings you would have received with the HST gone. The transition tax will stay in place until at least 2015.
"I think that defeats the purpose of the referendum. We voted to send it back to the PST and we want the system as is on day one," said Jordan Bateman, BC Director for the Canadian Taxpayers Federation.
For more information on the return to PST click here.