'Skinny TV' switch means tax hike for most B.C. cable subscribers
Cable subscribers who don't switch will pay more tax because of the province's PST rules
The new 'skinny TV' basic cable packages that were meant to save consumers cash could actually end up costing many B.C. households more when their next cable bill arrives.
That's because customers in B.C. get a PST exemption on cable television, but only for the cost of the cheapest package.
For instance, in the past the cheapest package offered by Calgary-based Shaw was $41 per month. But Shaw, which has many customers in B.C., posted a 40-channel $25 basic package last week.
That means Shaw's B.C. customers who don't switch to the new cheaper package will pay PST on the difference of $16.
Since the PST is seven per cent, the extra cost to those consumers will be $1.12 per month, equal to $13.44 per year.
"As this will be the basis of the PST exemption for B.C. cable TV customers moving forward, the billed amount of PST on your invoice will increase," a statement on the Shaw website confirmed.
A similar statement was posted on the Telus website on Monday.
"Starting on your March bill, you will see an increase to your PST amount. This increase is due to B.C. taxation regulations, which have been impacted by mandated packaging changes," said the Telus website.
A customer service representative confirmed the cheapest Telus package will drop from $33 to $20, meaning customers who don't swap will pay $0.91 more PST per month, equal to $10.92 per year.
No plans to change tax rules
When asked about the changes B.C. Finance Minister Mike de Jong said the province has no plans to change the PST rules, meaning those who don't switch to the cheapest package offered will pay more tax on their cable bill.
The PST exemption does not apply to satellite or internet TV services, according to the provincial website.
The new cheaper cable packages, which are being rolled out by cable companies across Canada, were mandated by the CRTC.
The federal broadcast regulator ordered the changes a year ago, calling for "smaller, more affordable basic service that prioritizes Canadian TV services."
Shaw is calling its skinny package Limited TV. According to Shaw's website, its "plan focuses on the basics, providing access to limited programming options."
But the new packages have already been criticized for offering a poor deal for consumers.
It is estimated that 11.5 million Canadian households subscribe to cable TV, meaning the B.C. government could be looking at millions of dollars in extra revenue because of the changes.