WHEREAS the provincial Ministry of Small Business and Revenue is currently undergoing a Provincial Sales Tax PST review and is requesting input, and the PST is a tax on a tax that ultimately results in local government property tax increases; AND WHEREAS local governments are facing rising infrastructure needs but have few revenue opportunities other than property taxes, and the federal government, in recognition of the infrastructure funding challenges faced by Canadian local governments, recently provided local governments with a 100 Goods and Services Tax rebate: THEREFORE BE IT RESOLVED that the Union of British Columbia Municipalities enter into dialogue with the Province of BC to seek a 100 local government Provincial Sales Tax exemption or rebate; AND BE IT FURTHER RESOLVED that such exemption or rebate should not result in any reduction of grants in lieu or any other monies presently directed from the provincial government to local governments, nor should this be seen as an opportunity to download additional responsibilities to local governments without providing sufficient funding to compensate for such additional responsibilities.
Ministry of Finance The issue of the application of sales tax to local governments was submitted to the Provincial Sales Tax PST review which is still underway. Consideration is currently being given to extending the existing sales tax exemption for production machinery and equipment to local governments as part of the 2007 Budget process. The Province of British Columbia has traditionally chosen to support municipal governments in ways other than through sales tax exemptions because exemptions complicate the tax system and set precedents that could ultimately reduce the effectiveness of the tax as an important provincial revenue source.