Soft drinks are exempted from provincial sales tax along with other grocery store items. (Wikimedia Commons)

Yes, we could use a soft drink tax

NDP rejects useful tax advice because it’s not popular

The B.C. NDP government has snubbed its own hand-picked tax advisors, refusing their suggestions on how to replace the billions in revenue from Medical Services Plan premiums.

The fate of the expert panel’s advice was set in February, before their report was even complete. Finance Minister Carole James pre-empted it by announcing that MSP was going to be phased out starting with a 50 per cent cut in January 2019 and elimination the next year. It will be replaced with a payroll tax called the “employers health tax” that will hammer large-scale farmers and other businesses with substantial payroll costs.

The payroll tax lands on schools, hospitals and municipalities too, so your property taxes are likely going up. With raises being negotiated by public sector unions, who continue to get their MSP premiums covered, you’ll be paying.

The tax panel soldiered on and produced a final report in March, which was finally released and quietly rejected by the finance ministry two months later. Don’t feel too badly for these experts, however.

The panel, chaired by UVic economics professor Lindsay Tedds and including former finance minister Paul Ramsey and UBC law professor David Duff, billed just under $100,000 for their work.

The real scandal here isn’t the wasted money. It’s the experts’ suggestions that were tossed aside, apparently because they are seen as too politically risky.

You may have heard about one of them, extending provincial sales tax to soft drinks. They wanted sales tax on every retail bottled drink except plain milk and water, including diet drinks.

The bulk of this is sugar-laden soft drinks, iced tea and coffee, fruit juice concoctions and so on. They are a main source of the overdose of sugar self-administered by far too many of us, with consequences of obesity and diabetes. This would be a “health tax” that actually improves health, instead of this ill-considered payroll tax that the NDP government rushed into instead.

Soft drinks were exempted from B.C.’s seven-per-cent sales tax along with most other grocery items. This mistake could be corrected now, but politicians’ fear of sales tax increases is just too strong.

So you can imagine the reaction to another panel recommendation, to convert the PST into a “value added tax.” This is what the harmonized sales tax tried to do. It makes sales tax more fair to businesses that try to compete and create employment. But HST, for which I was a lonely voice in favour when it was imposed in B.C., remains a four-letter word.

With the U.S. steeply reducing business taxes, it would be great to have an adult discussion about tax reform and competitiveness, but we can’t.

Another proposal was to scrap or modify the home owner’s grant, introduced by Premier W.A.C. Bennett in 1957. Bennett sold it as relief from rising property taxes, which will rise more because of the “health” payroll tax on hospitals and the rest. But the HOG is now a sacred cow.

“The home owners grant is a regressive and unfair element of the tax system that could be significantly improved by making it income-tested and extending it to renters, which is an outstanding commitment of government,” the panel said in its report.

The finance ministry gave out a terse “background” statement on the report’s suggestions.

“It will be no surprise that a return to the HST is not on the table, and we are not considering a tax on sugary drinks or changes to the home owners grant at this time.”

Tom Fletcher is B.C. legislature reporter and columnist for Black Press. Email: tfletcher@blackpress

Just Posted

Move natural gas pipeline, MP suggests

Coastal GasLink could then avoid opposition

B.C. minister says rural internet is ‘railroad of the 21st century’

Jinny Sims talks details about the $50-million provincial and possible $750-million federal funds

Zero-interest student loans a huge relief: CMTN student union

Parliamentary secretary hears from Terrace students, alumni and staff

Tl’azt’en man emerges strong from leukemia struggle

“You have to find that inner you and fight back,” Darren says

WANTED: Five sought by RCMP

Police asking for public’s assistance finding five people on outstanding warrants.

After mosque attacks, New Zealand bans ‘military-style’ guns

The gunman killed 50 in a Christchurch mosque

Four people spat on in ‘random, unprovoked’ assaults: Vancouver police

Police ask additional victims to come forward after woman in a wheelchair spat on

Teen girl accused in plot to attack Kamloops school with weapons out on bail

Judge warned the girl she would be back in jail if she threatened to shoot anyone

Crown drops one assault charge against B.C. man linked to human remains probe

Curtis Wayne Sagmoen will still stand trial on one count of assault causing bodily harm in December.

POLICE: ‘Don’t leave children unattended in vehicles’

Williams Lake RCMP issue warning after attending complaint at Walmart Wednesday

ICBC shifts to Alberta model, with higher rates, private insurers say

Minor injury cap, court restrictions take effect April 1 in B.C.

Trans woman hopes funding cut will send message to B.C. rape crisis group

Rape Relief does not turn transgender women away and often connects them to other services, group says

B.C. sees fourth straight day of record-breaking warmth

Bob Marley said it best: The sun is shining and the weather is sweet

Most Read