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April 16, 2011

What Falcon Left Out on HST Credits

Why would a government that needs to build trust and credibility put out misleading information on the HST? Finance Minister Kevin Falcon is trying to sell the tax, but he is being selective with his facts. On Sean Leslie's Saturday afternoon show on CKNW, Falcon said that low income families would lose their HST rebate; he provided numbers but failed to mention the GST tax credit. Hopefully, the "fair and neutral" information pamphlet you will pay to distribute to every door will get it right.

The HST rebate consists of a federal and a provincial portion. The formula for calculating each part is very different. A yes vote to extinguish the HST would eliminate the provincial portion, but the federal GST rebate would remain, as would other rebates which are bundled with the HST/GST rebate payment, for example the carbon tax rebate. It all comes as one cheque or direct deposit, and Falcon might be making people think that they will lose the whole thing.

The annual amount of the provincial credit is $230 per family member for individuals with incomes up to $20,000 and families with incomes up to $25,000. The credit is phased out by 4 per cent of income above the thresholds.

The amount of the federal credit increases annually. For the last year the full payment was $250 per adult plus $131 per child for families with incomes up to $32,506. Single parents can qualify for an equivalent to spouse amount and singles can qualify for a $131 supplement. The credit is phased out by 5 per cent of income above the threshold.

Some examples

Last year a single person with no children and a $25,000 income was eligible for $381 per year in federal GST credits plus a provincial credit of $250 minus a provincial claw-back of $200 (4% of the $5,000 by which her income exceeded $20,000). That means the provincial HST credit was $50, or $12.50 per quarterly cheque. Kevin Falcon isn't telling you that.

A couple with two children and a $45,000 income was eligible to receive $137.30 per year in federal GST credits plus a provincial credit of $1,000 minus a provincial claw-back of $800 (4% of the $20,000 by which their income exceeded $25,000). That means the family's provincial HST credit was $200, or $50 per quarterly cheque.

On CKNW at 4:23 PM on Saturday, April 16, Falcon used the example of a desperately poor single parent with three kids and an annual income of $24,000, apparently the victim of the BC Liberal low wage policy. He said she receives $920 per year under HST but zero under PST, thereby demonstrating that he either doesn't know what he is talking about or he is engaged in deceit. That family was eligible for $893 in federal GST credits plus $920 in provincial HST credits, so Falcon got the provincial credit correct but in the absence of the HST, the family would receive $893, not nothing as claimed by Falcon. Furthermore, in the absence of the HST that family would not pay 7% on telephone or clothing. What's really shocking is that a woman could be in that situation and not eligible for income assistance, but the maximum monthly welfare payment for a family of four for someone with someone who is employable is $1,075.58.

The next time Falcon tries to scare low income families, he should at least mention that without the HST, they will still receive the GST and other tax credits, and the tax they pay will be eliminated on some goods and most services. He might also disclose how many families are in the shocking circumstances used in his example.