Stephen Harper may trash Gordon Campbell's carbon tax during his campaign stops in B.C., but here's something you won't hear the prime minister admit in open company: His government is making a killing on the thing! The carbon-tax-hating Tories are raking in $30-million from Campbell's carbon caper by charging GST on top of the carbon tax. (Check your last bill from Terasen Gas for proof.)
A tax on a tax. It doesn't get more Canadian than that, eh?
The Campbell government estimates the carbon tax will bring in $1.8 billion over three years. That means the feds will collect an additional $92 million by charging GST on the carbon tax. Some businesses will be able to recover the GST on their tax returns, but individual consumers will not. Universities, hospitals, charities and non-profit organizations will also get hit with the double-whammy. The bottom line: The Harper government will reap more than $30 million in profit during the first three years of the B.C. carbon tax -- all while Harper's Tories are campaigning against it, according to accounting firm BDO Dunwoody in a recent analysis.
But wait a second: Isn't Campbell's carbon tax supposed to be "revenue neutral?" Aren't you supposed to get back every single cent in offsetting income-tax reductions? B.C. Finance Minister Colin Hansen admits his "revenue neutral" numbers don't include the GST flowing out of your wallet to Ottawa -- something Victoria apparently tried to fight behind the scenes.
Bob Spiers, a retiree from Vernon, wrote a letter to Hansen about the double tax-grab and received this interesting reply last week: "The British Columbia government did ask the federal government to give the province back the net GST collected on the carbon tax so that it could be returned to British Columbians," Hansen wrote."Minister [Jim] Flaherty, the federal minister of finance, responded that . . . the federal government will not be returning the GST collected on the carbon tax." You see, you carbon-tax bashers? It's all Ottawa's fault!
Meanwhile, federal Liberal Leader Stephane Dion's call for a national carbon tax raises the spectre of yet another layer of carbon taxation in B.C. Seeing that turnabout is fair play, Spiers asked Hansen if the B.C. government would charge the provincial sales tax on top of a federal carbon tax if Dion wins the Oct. 14 election. "That is a decision the government would have to make," Hansen replied. Talk about a double standard!
Revenue neutral? In your tax-free dreams. msmyth@theprovince.com
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Don Quixote Note: The e-mail from Finance Minister Hansen and other e-mails and postings along the same lines.
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