The Business Council of B.C. is calling on the province to cut the provincial sales tax from seven per cent to 3.5 per cent for two years in an effort to bolster the economy amid the COVID-19 pandemic.
In a 31-page report released Wednesday, the BCBC says temporarily slashing the PST in half would encourage consumer spending and provide a “well-timed lift to retailers across the province.”
Dawson City Mayor Dale Bumstead says a cut to the PST would help “keep spending local.”
The report says slashing the tax would also support capital investment. It goes on to say the two years the cut will be in effect can be used to transition from a provincial sales tax to a value-added tax.
Rather than a return to the harmonized sales tax, the BCBC says the province could develop a value-added tax that “captures a wider array of goods or services, including fast-growing digital and other online services, compared to the narrow and increasingly complex tax base used with the PST.”
The group also called on the province to extend tax remittance deferrals for businesses significantly affected by the pandemic and the associated recession to the end of the year.
Other recommendations include adding child-care spaces, streamlining project review and permitting processes, and supporting large projects such as the replacement of the George Massey Tunnel and TransLink upgrades.
The BCBC says the report is the result of consultations with businesses, economic leaders, post-secondary institutions, and is intended to be a “non-partisan” look at how to cope with an unprecedented financial crisis.
“We can do better than simply recover from the pandemic,” BCBC president and CEO Greg D’Avignon said. “British Columbia has an opportunity to create a new normal for families and communities by building a more resilient, competitive, and stronger economy and businesses that makes sure the benefits are enjoyed by people all over the province.”
B.C.’s unemployment rate in June was 13 per cent.
A new report by the Canadian Federation of Independent Businesses says 158,000 small businesses across Canada are at risk of closing, including more than 21,000 in B.C.