Whereas in 2022 the BC Government initiated a Provincial Sales Tax increase of an extra 5 to be paid on all Fossil Fuel Combustion Systems for heating homes including: central forced air furnaces, unit heaters, fireplaces, boilers, storage water heaters, instantaneous water heaters, air conditioners and all replacement parts for said heating systems or similar systems to those listed: Therefore be it resolved that UBCM lobby the provincial government to exempt those who live in the northern regions of British Columbia from paying the Provincial Sales Tax surcharge of 5 on Fossil Fuel Combustion Systems in consideration of the climate in this geographical area and the inefficiencies of electric heat pumps in heating northern homes when temperatures drop to -20 degrees Celsius or below.
Ministry of Finance As of April 1, 2022, heat pumps are exempt from provincial sales tax PST and the PST on fossil fuel combustion systems that heat or cool buildings or water increased by 5 percentage points, from 7 per cent to 12 per cent. These tax changes incentivize switching a building from a fossil fuel heating system to a heat pump, which can help reduce the cost for people to make a shift that will save them money over the longer term while significantly reducing greenhouse gas emissions. The PST increase applies to high-efficiency gas appliances. While high-efficiency fossil fuel-powered appliances convert more fuel to heat than older appliances, they still have significant greenhouse gas emissions. For an average residential home, switching from a high-efficiency gas furnace to a heat pump can result in a reduction of approximately 1.6 tonnes of greenhouse gases per year. The change in PST rates is consistent with commitments in the CleanBC Roadmap such as the phase out of utility incentives for conventional gas-fired heating equipment, and the requirement that by 2030, all new space and water heating equipment be at least 100 per cent efficient. The PST changes are in addition to the rebates offered by the Province including top-ups for northern and rural communities and the federal and local governments. Heat pump technology has progressed in recent years, with even the government of the Yukon Territories promoting the use of heat pumps and offering rebates. Of note, the PST exemption for heat pumps is not strictly for electric heat pumps and includes heat pumps that function in various climates including cold climates the exemption includes: - Electric heat pumps; - Renewable fuel-powered heat pumps; - Fossil fuel-powered heat pumps; and - Hybrid heat pumps are single factory-integrated units that combine a heat pump and a furnace, boiler, water heater, or similar system.