Parking tax a gambit for bigger stakes?
Is TransLink playing a sly little game by ramming through a huge increase in the Lower Mainland’s parking tax?
I think so–although all I can say for sure is that nobody in the industry has any idea what the end game is, nobody in the provincial government seems to know either, and TransLink’s spokesman, Ken Hardie, didn’t return my call on Monday.
The increase, which in one fell swoop triples the provincial sales tax from seven to 21 per cent on parking fees, is bad enough on its own. But what stinks even worse, for two unrelated reasons, is the timing.
First, an announcement late last week gave parking companies less than four weeks to get ready to comply on Jan. 1.
That’s very short and, the parking companies say, inadequate lead time– especially with Christmas and New Years intervening–for them to change their meters, invoices and practices. Even contracts running past Jan. 1 that were prepaid weeks or months ago are retroactively liable for the higher tax. So the companies will have to chase down customers who, you can bet, will be irked to be hit up for 14 cents more on every dollar they’ve already paid in good faith.
So why the mad rush? (And there’s something even smellier about this timing.)
The Jan. 1 implementation comes six months to the day before the province is due to scrap its sales taxes and replace it with a seven-per-cent levy added onto Ottawa’s five-per-cent GST.
Does TransLink–which imposed its parking tax on its own authority, with no need to get provincial approval–intend to drive up the cost of parking in Metro Vancouver by 14 per cent for six months only, thereby raising a onetime grand total of about $18 million? Or does it have its eye on a bigger prize?
No one I’ve talked to seems to know. But I have a theory:
Back in September, it came to light that TransLink could be looking at a revenue loss of about $18 million a year (at the current seven-per-cent PST rate) if its parking tax was scrapped — as it must be — when the new HST comes in. Transportation Minister Shirley Bond said at the time, “Our commitment is to find a solution to allow that revenue source to continue.”
So I think TransLink’s real intended target here may be the provincial treasury, not the purses and pockets of those who park downtown, or at places like our hospitals and university campuses. I think the idea may be to use Bond’s vague commitment to put the province on the hook for three times as much as the $18 million in lost revenue she was talking about last September.
I asked the Finance Ministry point blank if this is how it sees the game. All I got was a carefully worded, ever-so-diplomatic response — that the ministry is “working with TransLink to address these sorts of implementation issues.”
In other words, the province’s tax people don’t know either.
The ministry did confirm that, under the terms of its agreement with Ottawa, it will not be allowed to maintain a differential sales tax rate on any good or service. In other words, it will have to charge seven per cent on parking–or else nothing at all, which is hardly likely.
Mind you, I wouldn’t put it past the province to try to find a creative way to keep the higher burden on drivers and off the provincial treasury. I can’t see them being eager to pony up an extra $35 million-$40 million a year on top of existing provincial support that, Bond says, already tops $500 million a year.
In other words, if TransLink and the provincial government are getting into a spitting contest over this issue, it’s most likely the taxpayers who’ll get wet.
December 8, 2009. Don Cayo. Vancouver Sun