TRU Political Science professor Robert Hanlon (Image Credit: CFJC Today)

By Chad Klassen

PST ELIMINATION PROMISE

TRU political science professor says PST proposal will gain Liberals votes, wonders how sustainable it is

Sep 28, 2020 | 5:33 PM

KAMLOOPS — The B.C. Liberal Party has made the first big splash of the election campaign. Leader Andrew Wilkinson is promising to eliminate the provincial sales tax (PST) for the first year if they’re elected as government.

Todd Stone, the Liberal candidate for Kamloops-South Thompson believes the promise to eliminate the PST for a year will help individuals and businesses struggling during the pandemic.

“It means for the average family of four that’s earning an income of $120,000, it means a savings of about $1,700 for that family per year,” he said. “A single parent earning about $60,000 per year will save almost $1,000 through this measure per year.”

The Liberals feel it could means the difference for some businesses between surviving the pandemic and closing permanently.

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“If you’re in the tourism sector, which has been just decimated during this pandemic, this measure will leave about $1.8 billion in the hands of tourism operators and tourism small businesses, giving them a fighting chance to make it through this winter and next spring,” noted Stone.

The promise by Liberal Leader Andrew Wilkinson would mean no PST in the first year. It would then be reduced from seven to three per cent for another year following. According to the latest budget, the PST accounted for $7.6 billion dollars in government revenue for the current fiscal year.

TRU political science professor Robert Hanlon says the proposal signs that COVID-19 will be a strong focal point of this election campaign.

“By proposing to cancel the PST for a year really does give a bit of an incentive to some voters. It will be real money in their pockets,” he said. “They can use it to go out and spend in the economy. What’s unclear, though, is obviously where that funding will come from with the loss of revenue in the billions of dollars.”

Hanlon says even the most fiscally Conservative governments have to be flexible around balanced budgets during these tough times, but he wonders how sustainable the move would be.

“There does need to be funding coming into programs,” said Hanlon. “So what they would propose to cut in that year is unclear.”

The Liberals have not specified how it would make up the losses, only saying it will run deficits to help individuals and businesses.

“We’re absolutely committed to maintaining healthcare and education funding levels where they are, if not growing them,” said Stone. “There will be no cuts to healthcare and education. We are not looking at other measures in terms of cuts in government.”