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Parking fees even higher, thanks to HST

Oops. I was wrong about the huge, looming increases in the sales tax rate on parking fees in Metro Vancouver. It turns out they’re even larger than I said.

The difference between the whopping big figures I reported and the whopping- even-bigger amounts you’ll have to pay is thanks to tax on tax, and the magic of compounding.

So as of Jan. 1, when TransLink is poised to triple the provincial sales tax on parking, the total rate, when combined with the federal GST, will be 27.05 per cent, not 26 per cent as I – and, not incidentally, as  the parking companies who must collect and remit this money-had thought.

And as of July 1, when the five-percent GST becomes the 12-per-cent HST, the hit will rise to 35.52 per cent, not the 33 per cent level that we nongovernment types – unskilled as we are in the art of gouging-had naively assumed.

The difference is in the math. You get 26 and 33 per cent when you add the two tax rates together. You get the higher values when you apply the GST rate, or HST rate, to not just the cost of parking, but also the 21-per-cent tax imposed under provincial legislation.

At present, the seven-per-cent provincial tax on parking and the GST aren’t compounded – they’re merely added together to get a total of 12 per cent.

So why will the two rates be compounded in the future?

According to an e-mail from the provincial Ministry of Finance, “because under the federal Excise Tax Act (the GST legislation) a tax rate that is more than four points above the provincial retail sales tax rate
(in B.C. that means 12 per cent or higher) is subject to the GST.”

Ditto after the HST kicks in on July 1, the e-mail said.

Of course, no one mentioned this to the parking companies on the assumption, I’m told, that it’s up to them to check with Canada Revenue Agency.

These companies are already in a tizzy, trying to meet what they see as an impossible deadline to comply by Jan. 1 with a huge change that wasn’t announced ’til Dec. 2.

They had been involved in some discussions with TransLink a few months ago, but that was over a proposed 14-per-cent increase, not 21, says Julian Jones, Impark’s vice-president of development. Nor
did his or other companies have reason to think it would come so quickly.

Jones tells me that, even without this new confusion over just how high a rate they’re expected to collect, his company can’t get all its ducks in a row by the Jan. 1 implementation date.

“The time frame is just ludicrous,” he said.

“We have to inform 20,000 monthly parkers. We have to go to every single meter and change the software. We have to change every sign.

“It’s a mammoth task, and we’re not going to be able to get every meter location changed in time.”

Other companies have expressed similar concerns, some suggesting an implementation date in the spring would have been more realistic and fair.

And all of them worry – but can’t even guess – what this will do to their volume of business, since they’ve never seen such a huge and sudden cost increase before.

It’s hard to read the tea leaves and figure out if the Ministry of Finance is feeling the heat from the dismay of the industry and the anger of the driving public.

On one hand, they’re digging in to back Finance Minister Colin Hansen’s assertion that the parking tax, long called PST in ministry documents, is really not PST at all. Up to a couple of days ago, I couldn’t get anyone to tell me if it was or it wasn’t PST. Now the line I get is that, shucks, they’ve known all along it isn’t PST, and they just call it that in their documents so as not to confuse people. (If you understand this rationale, please let me know. )

But on the other hand, they’re talking about working out the wording with CRA to come up with a clear statement for a revised bulletin to let the parking industry know just what the new rules mean.

This is overdue, and will barely begin to right the myriad wrongs with this policy and the way it’s being rammed through. But it’s a first step.

A good second step would be to postpone implementation for a few months to see if more bugs can be worked out and to give parking companies a reasonable chance to comply.

December 16, 2009. Don Cayo. Vancouver Sun.

  • Oemissions
    You know who should be paying for the billions of social costs that all taxpayers pay for: not just commuters and people who refuse to use transit when they could and can't be bothered to support alternative modes of transit..... the other big payer should be the auto corporations who spent trillions over the decades just on ads to get everyone to buy their wares, and even 2 or 3 of them per family.
    Automobiles have become our legitimate Weapons of Mass Destruction.
    As a senior and grandparent. I will go to my grave protesting the use of these life and habitat destroyers.
    My life is threatened everyday, just to cross a street on a light or on a legitmate crosswalk.
    It is even scarier with small children in hand.
    And ... furthermore.... what stupid design to make us SHARE streets and roads and passageways with these filth creating,toxic and NOISE creating machines.
    Thoroughly inconsiderate.
    Meanwhile our hospitals are overburdened with persons injured in auto accidents as are our emergency response teams and police, coroners and courts.
    A mile of road averages a million bucks to build.
    Joe Biden, US VP, just published an article on the case for for rail and quotes 13 million dollars per mile of road.
    We know that the auto companies lobbyed against public transit in favour of automobile use.
    With that came fast food joints, the folding of local neighborhood stores,wall to wall MALLS with no bus entry, lots of parking tho' and 2 car garage homes and mindless lifestyles with a society designed to serve the automobiles.
    WAKE UP and SMELL THE EXHAUST!!!!
  • richmondguy
    An irrelevant rant that does not contribute to the subject at hand.
  • Oemissions
    Running me down again,eh!?
  • gary m. assaly
    Of course I am against any new taxes,but what gauls me is that we have an unelected body with the power to tax. This board should start by cutting the number individuals on the Translink board and secondly substantially cut their bloated salaries which are obscene. It boggles the mind why the provincial and municipal governments in this country don't use the U.S. model for infrastructure projects. Its called tax free bonds. They issue bonds at below market rates which are tax exempt to the purchaser. On an after tax basis the yield is at near market rates. But of course you would have to have the co-operation of all levels of government and as we know this would be asking too much. We are being taxed to death in this province. Gas tax,carbon tax,parking tax and the list just keeps growing. The taxes on parking are just obscene. I have always voted Liberal,but I am re-thinking this one.
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