PST to be 'modernized' says B.C. government (but no HST… promise!)

The government will consult the public about changes to the sales tax system, three years after it scrapped the controversial harmonized sales tax.

Finance Minister Mike de Jong promises sales tax changes, but HST will NOT be considered

Former British Columbia premier Bill Vander Zalm, centre, waits to board a ferry in Tsawwassen, B.C., in 2010, to deliver anti-HST petitions. (Darryl Dyck/Canadian Press)

It's the issue that ended Gordon Campbell's political career, but in a surprise move, the B.C. government will reopen the sales tax debate — in an election year.

The government says it plans to 'modernize' its provincial sales tax (PST) system, which was first implemented in 1948 but has no plans to reintroduce the harmonized sales tax (HST), defeated in a referendum in 2011.

B.C. Finance Minister Mike de Jong has unveiled plans to establish a commission on sales tax competitiveness — which will consult the public and report back to government in the fall.

"The terms of reference will include asking the commission to consider ways to modernize the existing sales tax," de Jong said in his budget speech in Victoria Tuesday.

But the finance minister made it clear there will be no debating the merits of the HST.

"The commission's terms of reference will explicitly exclude consideration of a return to the harmonized sales tax," de Jong said.

The government forecasts it will collect nearly $6 billion in sales tax this fiscal year and $6.3 billion next year. That's more than any other form of tax other than personal income tax.

Details of what the commission will study have not been released. The government has not named a chair for the commission and outside of saying there will be no consideration of a return to the HST, it has not announced the commission's terms of reference.

"I'm going to leave it to the commission to present their ideas," de Jong said when asked what changes other than a harmonized sales tax could be considered.

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