Thomson: HST debate: Seeing the forest for the trees

While I believe the HST is good policy overall for B.C., as the Minister of Forests, Lands & Natural Resource Operations I have a unique perspective on several industries, including forestry.

You’ve been hearing a lot of information about the HST.

The recently announced commitment to reduce the HST to 11 per cent in 2012 and 10 per cent in 2014 and address the impact on families are important steps.

And while I believe the HST is good policy overall for B.C., as the Minister of Forests, Lands & Natural Resource Operations I have a unique perspective on several industries, including forestry.

It’s not an exaggeration to say the HST is almost universally supported in the industry. Why?

The short answer is, compared with the old GST/PST system, the HST is more efficient and provides savings that allow these businesses to invest and create more jobs.

According to Stacy Meadahl, controller for RJ Schunter Contracting Ltd., the savings are “significant.” Previously, logging equipment was exempt—but almost everything else was subjected to sales tax.

Why was that harmful? Under the GST/PST system, companies were paying significant amounts of sales taxes before they made a dime.

Logging trucks and pickups were not considered “logging equipment,” and were thus subject to taxation.

Those are significant but necessary expenses in forestry, which is increasingly competitive.

If operating expenses are too high, B.C. wood products become unreasonably expensive on the international market.

Not only is the international market vital for B.C.’s forestry industry —it’s crucial, says Brad Thorlakson, president and CEO of Tolko Industries Ltd.

“With the collapse of the U.S. housing market, B.C. forest companies know their future success depends on their ability to compete globally,” Thorlakson said.

“B.C.’s move to a more efficient tax system has been a key advantage for our industry to be a prominent player in these markets.”

The HST is also more efficient. Again, I will leave it to people whose livelihoods depend on the forestry industry to explain.

For one thing, “it simplifies the bookwork,” notes Meadahl.

Imagine you’re responsible for accounting in a forestry company.

For your financial records, you have to separate exemptions, for example, for logging trucks and equipment—one of which was exempt from GST/PST, one of which wasn’t.

“Mistakes were possible; you had to know what was exempted and what wasn’t,” says Meadahl. “Now, it’s just everything.”

The old GST/PST system wasn’t impossible, or unworkable. But it was, inarguably, more complicated and expensive.

“This competitive advantage in B.C. has strengthened our ability to retain jobs, keep buying and supplying goods, and contribute to the economy,” said Thorlakson.

What does that mean for ordinary British Columbians? In a word, jobs.

“The administrative and tax savings allow us to reinvest in the business to increase productivity and provide sustainable employment in our communities throughout B.C.,” said Thorlakson.

“Originally I was unsure how the HST would all work,” added Meadahl. “But once I realized it would work, I saw it would be better for us.”

You have the opportunity to make a very important decision in the upcoming referendum—I hope you’ll make an informed, thoughtful decision

Steve Thomson is the Liberal MLA for the Kelowna-Mission riding.

 

www.stevethomsonmla.bc.ca

 

 

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