HST Repayment Plan Triggers Sticker Shock

Image by: Vince Alongi

Ottawa and B.C. agreed this morning to the terms on repayment of $1.6 billion in HST transition funds.

The federal government has put a high price on B.C.’s HST mistakes, and our balance is due.

An ounce of prevention is worth a pound of cure. Or, in this case, an ounce of proper tax transitioning is worth about $1.6 billion.

The federal government and the province have finally decided to settle our massive HST debts. Finance Minister Kevin Falcon announced this morning that B.C. and the federal government set a repayment period of five years for the $1.6 billion in funding the province received to transition to the Harmonized Sales Tax.

According to the repayment terms, there’s a little good news tainted with some bad news.

The good news is the feds are waiving interest charges over the five-year repayment schedule, which means the province will save on those hefty interest costs.

Now, here comes the bad news: B.C. has a whopping balance of $1.6 billion due for a poorly implemented tax. Oops.

B.C. residents voted to scrap the HST in an Aug. 2011 referendum, resulting in repayment to the feds. One major issue voters referenced was a lack of consultation before the tax was introduced in July 2010.

Whether you voted for or against the tax, the federal repayment costs along with the costs to move back to the PST/GST are overwhelming.

Sticker shock, anyone?

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  • lindsey peacock, 
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  • HST, 
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