WHEREAS under previous tax programs, local governments received a more substantial rebate; AND WHEREAS with the reintroduction of the GSTPST program, local governments will not earn rebates under the PST, which will cause an unreasonable financial burden to local governments: THEREFORE BE IT RESOLVED that local governments be exempted from paying PST; 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 Local governments pay no more in PST under the Provincial Sales Tax Act than was previously paid under previous PST under the Social Service Tax Act. The provincial rebate provided to municipalities under the harmonized sale tax HST of 75 percent was to ensure that, on average, municipalities paid no more in tax under HST than was previously paid under the PST. The PST applies to the same goods and services which were subject to tax under the previous PST. There was no general exemption from PST for local governments. There was an exemption for machinery and equipment obtained by local governments for electricity generation or generation of electricity and heat at a cogeneration plant and this exemption was re-instated with the re-implementation of the PST. British Columbias policy regarding the general application of sales tax to local governments is, with limited exceptions, consistent with most other provincial governments, including those which have harmonized their sales taxes with the federal GST. No change to this policy is under consideration.