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Bill’s Weekly Report July 20, 2010

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Last week was certainly a memorable one. Cabinet met in Kelowna for 3 days, we had the Ministers of Finance and Healthy Living & Sport in the Riding; and of course, I had a couple of days of controversy over an email sent inadvertently by my office. Never a dull moment!
 
Starting with the last and least important first, the email was a rough draft that used a radio story of urban environmentalists still clamoring for a park in the Flathead as an example of how these groups are never satisfied. The email referred to them in a very derogatory way and I took responsibility, despite not sending it personally. Naturally, the PC forces were all “outraged” as they often are with me. I appreciate all of you tax-paying, voting British Columbians who, as you always do, rallied to my defense.
 
On a more positive note, our cabinet had 3 great days in Kelowna to discuss our strategy and policies going forward. In addition to many good substantive policy debates, we had some very interesting and valuable exchanges about what we did wrong around the launch of HST and how we can earn back the trust of the people. It will take considerable effort, but all of us BC Liberal MLA’s have one thing that unites us…we will all do our utmost to stop the NDP from ever forming government again in BC!
 
On Thursday, Minister Ida Chong came to Cranbrook. Jennifer and I hosted her at Rotary and wouldn’t you know it, Rotary needed a speaker so Ida was pressed into service. She talked about how her ministry (Healthy Living & Sport) has many initiatives to address preventative healthcare issues; smoking, diet, exercise, chronic disease management and so on. I think she was a big hit. In the afternoon, Ida and I toured the new Disabled Athlete & Conference Centre in Kimberley. What a beautiful facility and attraction that will be for athletes from around the world, and included is a terrific, large conference centre as well.
 
On Friday, Finance Minister Colin Hansen spoke at a Chamber Breakfast in Cranbrook and at a well attended luncheon in Fernie. His message was positive. Canada is leading the world on economic recovery and BC is poised to lead Canada. We British Columbians can be proud of our strong fiscal management…the rest of Canada and the world envy our economy, our prospects and our life style.
 
Take care and we’ll talk again next week.
 
Bill

Bill’s Weekly MLA Report July 5, 2010

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Last week was back to school for your MLA. With Thursday a holiday, I gave Jennifer and Brenda Friday off to recover from their anti-HST woes in the Cranbrook office and I committed myself to 5 days of briefings and meetings in ministry business. The Ministry of Energy, Mines and Petroleum Resources covers a wide range of issues, including surface and underground mining, mineral & coal exploration, oil and gas development, energy, BC Hydro, alternate energy sources, First Nations, environmental & community issues.

I won’t bore you with many details, but of relevance is the newly passed Clean Energy Act. This new Act establishes that BC intends to be self-sufficient in electricity and that we will also aim to export power to increase our export revenues for tax payers. BC has been a net importer of electricity for 8 of the last 10 years and for a province blessed with our potential to generate clean, affordable electricity, this is a travesty. BC Hydro has been charged (sorry for the pun) with putting together an Integrated Resource Plan over the next 18 months, to determine what we need to do to become self sufficient and then eventually to also develop enough “insurance power”.

As for export, we will first need to identify secure markets. My senior staff was just in California with the new CEO of BC Hydro. I will be going sometime this summer myself to explain to California legislators how they can replace some of their aging, dirty power plants with clean hydro electricity from BC. The Clean Energy Act requires the province to pay for any new generation directed at the export market from export profits, not from domestic rate payers. This is an essential commitment that you must know about. When you hear people say that independent power projects for export will drive up the cost of your electricity, you can safely and confidently tell them they are wrong. No doubt electricity rates will go up over time as our existing aging heritage assets need upgrades. However, the cost of developing export generation will not be connected to domestic rates!

Other than a fascinating half day briefing with BC Hydro in Vancouver, I also met for two days with mining and oil & gas companies, all of whom have ideas for investing in our province and creating jobs. My ministry has the most positive things going on in it of all ministries so you can expect me to be out in the media over the next year talking about the good things happening around BC. As I mentioned a few weeks ago, this ministry provides well over half of all resource revenues that your government receives. It is an honour to have this opportunity and gives Kootenay East lots of opportunity for influence.

On Wednesday when I was in Vancouver, I had two meetings with senior political junkies, both of whom have been involved in provincial and federal politics since the 70’s. They are both federal Conservatives and BC Liberals and are of course worried about the impact that our disastrous handling of the HST file will have on the next election. I am also receiving emails from a few people who have voted for me three times and are questioning whether they will do so again. As upset as some of our supporters are, with some justification too, we will all need to pull together to avoid turning this beautiful province over to the NDP. I tell you in all seriousness, I sit across from them in the legislature 6 months of the year and they are not simply moderate BC Liberals. They actually believe that government “knows best” and that’s coming from a group that is comprised of a few teachers, no business people, and the rest largely unburdened by higher education or experience at meeting a payroll. I’m not sure where they get their bizarre ideas about all business being evil and profit being a dirty word but if given the opportunity, they will set BC back just as they set us back in the 1990’s.

We need to remind our friends what the province was like 10 years ago. We had the highest income taxes in the land, our neighbours were moving to Alberta and our kids left and never came back. Real disposable income has gone up every year we’ve been in government, whereas it went down every year the NDP were in power. Our income taxes are the lowest in Canada. BC is predicted to lead Canada in economic growth. We should all take a breath, set HST aside for an hour or two, and celebrate the success of our blessed province, fresh off the most successful Olympic Games in history, the greatest exhibition of Canadian pride ever. We are still the Best Place on Earth! But in British Columbia, that can change over-night with a return to the NDP. I will work my tail off to do my part. Thanks for your support. Keep your chin up!

Have a great week.

Bill

Bill’s Weekly MLA Report June 29, 2010

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Last week, I spent the first two days immersed in back-to-back briefings on my new ministry. I felt like they had a fire hose down my throat and were pumping info into me faster than I could digest, but that’s process for new ministers. I actually enjoy learning, so it was fine. Also met with Alberta Energy Minister, Ron Liepert, who is a guy about my age (youngster) and we talked about creating one set of rules for oil & gas across western Canada.

On Tuesday, I had meetings at the BC Hydro head office in Vancouver. BC Hydro is accountable to my ministry. I took the opportunity to discuss water levels in the Columbia River system and levels specifically at Koocanusa. Levels are going down all over the NW, including the Columbia, even with the rain we’ve had. I am also starting to get up to speed on the Columbia River Treaty renewal, issues that will be critical to the province and to our region in particular.

Wednesday is cabinet day and I can’t tell you what we discussed but again, as I said last week, your MLA sits there with all the other ministers and the Premier for several hours. There is opportunity to discuss constituency matters, to advocate, to explain, to remind. I suppose most folks probably don’t realize the benefit of having their local MLA at the cabinet table.

On Monday, Jennifer spoke on my behalf at the Reconciliation Sculpture ceremony at the Canadian Rockies International Airport. You should take time to view this important sculpture. It shows the progress of the Ktunuxa and us newer folks gradually coming together over time in the form of their traditional canoe. The artists, Paul Reimer and Michael Hepher, from Cranbrook, did a magnificent job and the mayor and council of Cranbrook should be commended for assisting with this project.

I had the honour of cutting the ribbon at the grand opening of the Fisher Peak Art Gallery in Cranbrook on Thursday.  They’re located at 821B – 1st Street South.  I recommend you drop in and meet Nicole.  She’ll inspire you to never give up on your dreams.  Her gallery is a testament to making her lifelong dream a reality.  I wish Nicole and her husband Larry all the best and thank them for contributing to our business and cultural community!  Great place to find a gift for someone special, so head on in there.

On Thursday night, I spoke to the Mount Baker graduates in Cranbrook, thanks to the invitation from our wonderful principal, Debra Empson. I really like working with young people so even though I didn’t have much time, I made sure the grad’s heard something more than “good luck and congratulations.”  I got their attention by telling them that their MLA never graduated from high school, but that I did earn a law degree at the age of 42. I told them that “not all who wander are lost,” and that a little wandering in life is a good thing because life is a journey and we should not be in a hurry to reach the destination. I hope I made some of them feel ok that it’s not a bad thing if they are not certain exactly what they want to be or do at this stage of their young lives. And I told them that they must vote, that it is essential to democracy that they engage in the political process and that they volunteer in their communities. They were an enthusiastic lot. I was very envious of their pure joy in the moment.

At Rotary last Thursday, Melba Hansen of Community Foundations and Captain Kirk Green of the Salvation Army presented the work they’ve been doing to build a permanent homeless shelter here in Cranbrook.  They are partnering with BC Housing, our government’s housing agency, to build the East Kootenay (Cranbrook) Homeless shelter which is anticipated to have 20 spaces each for men and women, 2 family units and 10 transitional housing units for longer term stay.  I encourage you to find out more about how you can help to make this project become a reality.  Contact the Community Foundation at 250-426-1119.  Donations are tax deductible.

We heard today that B.C. is doing better than the rest of the country, according to economist, Alex Koustas with Scotia Economics, who says B.C. will see a GDP growth of 3.8%, compared to Canada’s predicted growth of 3.6%. Koustas went further by saying that, “…part of it is from the Olympic Games that we saw in February. They really sped up some economic activity and some spending in the province. But also, we’ve seen the fundamental industries in the economy really start to turn around as well, particularly in commodity markets, which kind of led things out of the downturn. We’ve seen shipments in coal and copper increase significantly, and that’s increased traffic at the ports.” Koustas also pointed to a resurgent forestry industry as another good sign for B.C.’s economy.
In the next few weeks, Finance Minister Colin Hansen is coming to the Riding, as is Healthy Living and Sport Minister, Ida Chong. We’ll be in touch to let you know where you can connect with them.

Take care and have a wonderful week.

Bill
 
 

HST is Just Good Policy May 17, 2010

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Today I want to talk about our future here in BC, and what your provincial government is doing to ensure that BC comes out of this global recession as a leader, not only in Canada, but in the world.

More than ever before, governments today must do everything possible to create a climate where business investment is encouraged by low taxes. This isn’t about helping business make more profit – business will take care of itself. This is about govt putting into place the right conditions for business to want to invest in creating new jobs. We saw what happened in the 90’s when govt raised taxes. Investment dried up, jobs dried up and it seemed no one in the world wanted to invest in new jobs in BC.

We should be proud of how far BC has come since 2001 when our govt was first elected. After 120 different tax cuts over the past 9 years, we now have the lowest personal income taxes in Canada and the second lowest overall tax burden in Canada – now ask yourself. Did you know that BC has the second lowest tax cost in Canada?

We’ve been creating good jobs for the last several years and the province is now a confident, positive place compared to the 1990’s. Just last week, financial experts predicted that BC and Ontario would lead Canada in economic growth.

Now — I know that harmonizing the federal GST with our Provincial Sales Tax has been unpopular, but this tax policy is just as important to our future as lowering income taxes was. And it is just another step towards keeping us ahead of the rest of the world.

Don’t take my word for it…the economist, Professor Kevin Milligan from the University of British Columbia, said recently, “HST isn’t a left-right issue, and it isn’t ideological as far as economists are concerned. It is just good policy.” The professor went on to point out that “It isn’t pro-business and anti-consumer. It is the necessary modernization of tax policy. Over time, consumers will benefit.”

You know what’s interesting is that almost every credible economist in Canada is saying we in BC will be better off in the long term because of this new tax policy. These people are not politicians. Unlike Mr. Vanderzam and the NDP, they have no political axe to grind. These experts are the people who study and understand how the economy works.

Now I want to be fair. It’s true that some items like restaurant meals and golf memberships will attract 7% as of July 1st. But it is also true that the basics in life are free of HST, basics like groceries, children’s clothing, prescription drugs, residential rent, all fuels and new houses (up to $550,000). It’s also true that local ranchers, loggers, and small businesses like mine suppliers, appliance and furniture dealers in our EK towns will be more competitive with Alberta.

You may not realize it, but when you buy a retail product or service, the price you pay includes hidden sales tax. That’s the tax that businesses pay on their costs as the product or service is produced. These businesses will no longer pay that hidden sales tax and may be able to reduce consumer prices.

Don’t believe prices will fall? According to a 2007 study by University of Toronto professor Michael Smart, in the Maritimes consumer prices fell after HST was introduced. If you want more proof, there are a number of studies showing that consumer prices are lower in countries that use a value-added sales tax like the HST. It is in the opposite from what you are being told by Mr Vanderzam and the NDP.

It’s the truth that for the most part, the public debate about HST has only been informed by the opponents. Did you know, for example, that a sales tax is known as a consumption tax – and that every tax expert in the world tells us consumption taxes are fairer and smarter than income taxes because with a consumption tax you pay on what you consume, not on what you earn.

What’s true and what’s most important about HST is that we will see thousands of new jobs in our communities and a stronger, more competitive British Columbia.

For the truth about HST, go to: www.gov.bc.ca/hst

Authorized by Bill Bennett, registered sponsor (IPA-2010-002-035) under the Recall & Initiatives Act, 250-919-2255

Disharmony Over a Sales Tax May 3, 2010

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Since one focus in the HST debate is on the issue of when it was first considered and decided, I will set out in this column how and when we decided to adopt a harmonized sales tax. While I agree that government in normal circumstances would not announce a major policy within a month following an election, without talking about that policy during the election, the circumstances facing BC last May were anything but “normal.” Think back to a year ago as the world economy sank faster and further than any economist predicted. Both Alberta and Ontario were further off on their deficit predictions than we were. By the time cabinet was sworn in in June, government revenues had dropped like a stone. Should we have known how bad the economy would get? No one in the world predicted it accurately. So in June we realized the Province was at risk of a much larger deficit and I, like the rest of my colleagues, was looking for a way to avoid a much larger debt or raising income taxes.

At this time, the federal government encouraged us to harmonize our provincial sales tax with the federal GST. We learned we’d get $1.6 billion in transition, a real option to avoid adding more to our debt. Still, that financial assistance was not enough for me. I had to be sure that harmonizing the two sales taxes was good for BC in the long term. Would it be good for my two sons and their future? That’s an important test for me.

After hearing that consumer prices generally are lower in countries with a harmonized sales tax, that most credible economists in Canada touted HST as game changer for BC, how HST would create 113,000 new jobs, and how studies in Atlantic Canada proved that consumer prices go down after HST, I agreed to support it.

As for why we acted so quickly, we had until July, 2009 to decide or lose the opportunity to implement with Ontario on July 1st, 2010. It takes at least one year to switch from a provincially administered program to a federally administered sales tax program. I did attempt to communicate the details of HST through MLA columns, interviews, speeches, emails and meetings in my office, but clearly I failed. That, however, does not change how beneficial this will be for BC.

I never talked about HST in my election campaign. Frankly, I never even thought about it. As far as I am aware, it was mentioned once in the campaign by the premier, who said in response to a question, we had no plans to adopt a value added tax. And we did not. My cabinet colleagues and I have put our personal integrity on the line because we believe this is a policy that will help BC compete for jobs and investment in the new, hyper-competitive world we have inherited, following the worst global recession since the 1930s. There was no conspiracy, no lying, just some ordinary people elected to the provincial government trying to deal with a really big challenge. I urge you to get the facts at http://hst.blog.gov.bc.ca/.

[Authorized by Bill Bennett, registered sponsor (IPA-2010-002-035) under the Recall & Initiatives Act, 250-919-2255]

Ten “HST” Facts April 19, 2010

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My friend Pat Bell put together the Ten Facts below that sorts out some of the misinformation on HST.

1.       You may have heard  “The HST adds $2,100 to your yearly costs”
a.       You would need to spend an additional $30,000 on currently PST-exempt items to reach $2,100
b.      For a Family of 4 with a $60,000 annual income the true impact is $8.91 per month.
c.       A Senior Couple with a $30,000 income will be impacted by an additional $1 per year.
d.      A Family of 4 with a $90,000 income will be impacted by an additional $14.83 per month.
e.      A Family of 4 with a $30,000 income will actually benefit by $44.58 per month (because of the BC HST Credit)
 
2.       You may have heard “Everything will cost more”
The vast majority of retail items will see no tax change with HST
Items on which you pay PST and GST today stay exactly the same. (7%PST + 5%GST = 12% HST)
a.       New cars, trucks, boats, recreational vehicles
b.      Furniture
c.       Electronics
d.      Kitchenware
e.      Toiletries
f.        Hardware and tools
g.       Adults clothing
h.      Pet Food
 
3.       You may have heard “Housing will cost more”
a.       No HST on used homes  which make up 80% of total sales in BC
b.      HST rebate will apply on new homes up to $525,000 – maximum $26,250
c.       Homes above $525,000 are eligible for a rebate of $26,250
d.      In BC –  73% of home sales are under $500,000
e.      In Northern BC  99%  of home sell for less than $500,000
 
4.       You may have heard  “You’ll pay more for car insurance, home insurance…”
The HST won’t change the price of any of those items. They are exempt.
 
5.       You may have heard “Staying warm and keeping the lights on will cost more”
Home heating fuels and residential electricity are eligible for a point-of-sale rebate, including:
a.       Oil
b.      Natural gas
c.       Propane
d.      Wood and wood pellets
HST won’t increase the cost of heating or powering your home
 
6.       You may have heard “It will cost more to feed my family”
These are ALL zero rated –
a.       basic groceries such as milk, bread, and vegetables.
b.      agricultural products such as grain, raw wool, and dried tobacco leaves.
c.       most farm livestock.
d.      most fishery products such as fish for human consumption.
e.      prescription drugs and drug-dispensing fees (in case you buy these at the grocery pharmacy).
The general rule of thumb is – if there is currently GST on any item at the grocery store than HST will apply. 
 
7.       You may have heard “The disabled will be impacted by additional cost for medical devices”
These Medical devices are zero-rated:
(a)    hearing aids
(b)   heart-monitoring devices
(c)    hospital beds
(d)   breathing apparatus
(e)   asthmatic devices
(f)     prescription eyeglasses/contact lenses
(g)    artificial eyes
(h)   artificial teeth such as dentures, crowns and bridges, orthodontic appliances
(i)      aids to locomotion such as a chair, commode chair, walker, wheelchair lift or other aid to locomotion for use by an individual with a disability
(j)     patient lifters
(k)    wheelchair ramp; portable wheelchair ramp
(l)      modifying motor vehicles to adapt the vehicle for the transportation of an individual using a wheelchair
(m) prescription orthotic and orthopedic devices
(n)   prosthesis/devices
(o)   canes or crutches
(p)   articles for blind individuals
(q)   guide dogs for blind individuals and hearing ear dogs
(r)     supplies and services related to medical and assistive devices.
 
8.        You may have heard “Children’s clothes and items will increase”
Children’s clothing and items below will not be subject to the provincial portion (7%) of the HST or HST exempt
(a)     Children’s clothing designed for babies, girls, and boys up to and including girls’ Canada Standard Size 16 and boys’ Canada Standard Size 20, or clothing designated for girls and boys in sizes small, medium or large if the clothing does not have a designated Canada Standard Size would be eligible for point-of-sale rebate.  This would not include costumes or clothing like sports protective equipment.
(b)    Children’s footwear designed for babies, girls, and boys up to and including girls’ size 6 and boys’ size 6, including footwear without a numerical size that is designated for girls or boys in sizes small, medium or large would be eligible for point-of-sale rebate. This would not include skates, rollerblades, ski-boots, footwear that has cleats, or similar footwear.
(c)    Diapers, including cloth and disposable diapers designed for babies and children, and diaper inserts and liners, rubber pants, and training pants would be eligible for point-of-sale rebate.   Incontinence products would be zero-rated under HST, in accordance with current GST rules.
(d)   Children’s car seats and car booster seats that are restraint systems or booster cushions that conform with Transport Canada’s safety requirements for Standards 213, 213.1, 213.2 and 213.5, as described under the federal Motor Vehicle Safety Act would be eligible for point-of-sale rebate.
 
9.       You may have heard “Education costs are going to increase including my child’s music lessons”
Educational services such as courses supplied by a vocational school leading to a certificate or a diploma which allows the practice of a trade or a vocation, or tutoring services made to an individual in a course that follows a curriculum designated by a school authority;  music lessons are not taxable.
 
10.   You may have heard “HST will hurt small business”
HST will be good for business. It will replace hidden sale tax and small businesses will get additional tax cuts.  Currently, PST is applied at every step in the creation of a product. Those multiple PST charges are embedded in the price you pay at the store – even though you can’t see it. And of course, you pay PST on the final purchase price. Under the HST system, most of those embedded costs are removed and savings can be passed on to the consumer.

The party’s over, but there won’t be a hangover March 3, 2010

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An Olympic hangover can last for years, if not generations. Just ask some other host cities and countries.
Beijing’s half-billion-dollar Birds Nest, the spaceship-like stadium at the centre of the 2008 Olympics, has yet to find a real use. It’s now serving as a winter amusement park. They might make it into a mall.
Athens’ 2004 Games left a crippling debt, the tipping point that pushed Greece into its current financial crisis. Its billion-dollar venues are hardly used.
In 2000, Sydney held one of the best Olympics ever. But when the party was over, they found there was little use for the stadium and that there was a billion-dollar-plus debt, too.
Let’s not forget Montreal, host of the 1976 Games that left the city in a debt that took a quarter of a century to pay down.
They still don’t know how to make money out of the Olympic Stadium — the Big Owe.
A common thread in all the examples above is these were cities that held the Summer Olympics, a truly mega event that often spins its way into financial disaster.
For a while Vancouver’s business leaders considered hosting a Summer Games, too, in conjunction with Seattle.
Luckily, some perspective prevailed. We bid for the other Olympics, the Winter Games, which are smaller and carry much less financial risk.
In fact, it’s starting to look like the 2010 Games just might offer up a new model for holding a Games, proving a Winter Olympics can be an economic catalyst.
We’ll have to wait years to measure what the precise spinoffs of these Games are. In the meantime, we now have to face some sobering economic news in the provincial budget today. Deep cuts are expected to be part of the plan to rebalance the provincial government’s deficit spending.
But what seems clear is there won’t be any serious Olympic hangover in economic terms. Instead, these Games have set a new standard — with limited construction cost over-runs contained early on — on how to leverage the Winter Olympics as an urban development model for a mid-size city, as Vancouver is.
Most Olympic host cities and countries expend most of their energy on winning a bid, building costly venues and then holding the Games.
Much less attention has usually gone into the so-called legacy of an Olympics.
But Vancouver’s Olympic Organizing Committee, and the provincial government, spent energy on the legacy question from the start, seeing the Games as a catalyst for public infrastructure projects and policy initiatives that will endure.
We’ve got the Canada Line, built on time and ahead of schedule. Linking Richmond, Vancouver and the International Airport, it is as significant as the SkyTrains that were built for Expo 86 that helped shape Metro Vancouver’s growth.
There’s the Sea to Sky Highway, creating a safer and faster highway from Whistler to Vancouver.
Whistler may be a well-known resort, but it has never had the publicity it has received during these Olympics.
Once the financial woes of Intrawest are sorted out, the highway is likely to bring about another boost in tourism and more resort development along the corridor.
The $900-million Vancouver Convention Centre, once a controversy for coming in at double its budget, is now clearly an anchor for Vancouver’s convention trade.
Thanks to the Olympics, any question about Vancouver being able to host a major event, where tens of thousands of conventioneers come to town, has been laid to rest.
What we don’t appear to have are any white elephants. Even the $178-million Richmond oval, which was about $100 million more than first forecast, is seen as a community centre and new riverfront focus for future development.
Finally, the Olympics have given first nations unprecedented profile in modern British Columbia.
One thousand people an hour moved through their pavilion. They have taken a key role in all official aspects of the Games and their message is clear: first nations are now woven into the future economic development of British Columbia and, more importantly, most of those aboriginal leaders are keen to do business.
Winter Games have historically been seen as the tiny Olympics.
Vancouver has shown that, in fact, they can be huge.
By Miro Cernetig

mcernetig@vancouversun.com

Bail Your MLA out of Jail Fundraiser February 23, 2010

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Our MLA Bill Bennett has volunteered to be a “MOST WANTED” for the Fernie Rotary Club’s Jail ‘n Bail fundraising project with proceeds going to the Fernie Food Bank.  Bill will be arrested during Griz Days in Fernie, March 5 – 7th, and his bail has been posted at $5,000!

Your support of Bill’s efforts to set a new MOST WANTED fundraising record of $5,000 for the Fernie Rotary Club’s community projects will be most welcome!

To make a pledge to help bail Kootenay Bill out of jail and to contribute to a very worthwhile community initiative, contact our constituency office in Cranbrook at 250-417-6022 or reply to this email at jennifer.osmar@leg.bc.ca.

Cheques are made payable to the Fernie Rotary Foundation and should be mailed or dropped off to the Constituency office address below.  Charitable receipts will be issued for donations of $20 or more.  Our deadline for donations is March 4th, 2010.

HST Best Thing Since Powder Sking January 18, 2010

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Good public policy often does not make for good politics. Such is the case with the forthcoming introduction of the new harmonized sales tax.  Since the joint federal-provincial announcement last summer, much of the debate has focused on “political hay”, rather than on the “public policy” merits of the measure.
The HST is the best public policy initiative that the federal and provincial governments can take to improve the position of Northern British Columbia’s resource-based export industries. Here’s why.
By removing the PST now paid on business inputs, most sectors of the economy will become more competitive. Approximately 40 per cent of the PST is paid by businesses on goods and services which they purchase to run their operations – machinery, equipment, office supplies, furniture, energy, legal services, among many others. With the removal of the PST, businesses will be able to invest, grow, and create well-paid family-supporting jobs.
The paperwork burden associated with the administration of the two tax regimes (PST and GST) will decline. Currently, there are duplicate sets of tax rules, administrative authorities, and compliance requirements. Estimates place these savings at $150 million per year.
Many products will decline in price once the HST is fully implemented. Most businesses will receive a 12 per cent credit on the HST they pay. In a competitive market, these savings will flow to consumers as price reductions.
On a sector basis, the B.C. Ministry of Finance estimates $880 million in savings for construction, $210 million for transportation, $140 million for manufacturing, $140 million for forestry, and $80 million for mining and oil and gas per year. These industries form the backbone of the northern resource-based economy.
There is a lengthy list of exemptions from the HST including medical and dental services; child care services; long-term residential care; residential rent; legal aid services; most educational services; groceries; prescription drugs; medical and assistive devices; agricultural and fishing products; and, most financial services. Rebates will apply to municipalities, charities and non-profits, and new housing (new houses will be HST exempt up to $400,000 while homes over $400,000 will be eligible for a $20,000 HST rebate).
B.C. joins other provinces – except Saskatchewan, Manitoba, and Prince Edward Island – who have an HST. On policy alignment grounds alone, B.C. has little choice but to follow suit, especially with Ontario’s adoption of the HST.
The provincial government will benefit from a $1.6 billion one-time payment which can be used to trim the provincial deficit and maintain hard-won gains in the province’s overall personal and business tax competitiveness and fiscal position.
While the TD Bank published a study in September suggesting prices will increase by 0.7 per cent across the board, another study on the experience in Atlantic Canada suggests that consumer prices, with few exceptions, fell by 0.8 – 0.9 per cent following the HST. At the same time, with the HST in place, annual investment in machinery and equipment rose 12.2 per cent above trend levels in Atlantic Canada.
It is not a stretch to say that the new HST is a “game changer” for British Columbia’s productivity and competitiveness.
Moving to an HST will reduce B.C.’s marginal effective tax rates on new business investment from 26.4 per cent to 15.7 per cent or a reduction of nearly 41 per cent.
British Columbia at 15.7 per cent will be more competitive than Alberta (16.6 per cent), the Canadian average (16.1per cent), United States average (34.4 per cent) and the average of the Organization of Economic Cooperation and Development (21.9 per cent).
It is important to acknowledge that some service sectors – notably tourism and restaurants – may experience transitional challenges as the HST is implemented. There is a legitimate concern over “sticker shock” with the HST’s introduction, and the federal and provincial governments should find ways to ameliorate short-term impacts.
B.C. has emerged this decade as a highly tax competitive jurisdiction.
Improvements to the corporate income tax rate, the scheduled elimination of the small business income tax rate by 2012, the elimination of the capital tax, and significant reductions in personal income tax rates are making B.C. a more attractive place to invest, work, and live.
The move to an HST continues B.C.’s march from laggard to leader in tax competitiveness which will shore up the long-term prospects of our resource-based export industries.
More investment, more jobs, and a better standard of living for Northern British Columbians! Isn’t that something we can all get behind?
By Tim McEwan , Prince George Citizen

Federal Provincal Partnership In Elk VAlley November 24, 2009

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Residents from Fernie and Sparwood will benefit from federal and provincial infrastructure funding with a $7 million upgrade to Highway 3, announced today by Kootenay-Columbia MP Jim Abbott and Kootenay East MLA Bill Bennett. This project is just one example of both governments’ commitment to stimulating the British Columbia economy through the creation of jobs in our communities.

This project will create local jobs to construct passing lanes on Highway 3 in both directions between Hosmer and Olsen, improving time, safety, and convenience of drivers.

“Under the leadership of Prime Minister Stephen Harper, our Government is getting shovels in the ground and flowing money faster to stimulate the economy and create jobs for British Columbians,” said Kootenay-Columbia MP Jim Abbott. “Working together with all levels of government, we can build the infrastructure that will help the economy to thrive now and in the future.”

“By adding passing lanes in this area of Highway 3, the many people who commute between Fernie and Sparwood-Elkford, will have a safe option to pass slower traffic,” said Kootenay East MLA Bill Bennett. “Residents of the Elk Valley have been asking for this for awhile as east-west traffic on Highway 3 has grown tremendously. It is gratifying to once again work jointly and constructively with MP Jim Abbott on getting this done for the benefit of all our constituents in the Elk Valley.”

The government of Canada will invest $3.5 million and British Columbia will contribute $3.5 million to invest up to $7 million in the project.

This project is one of 27 across the province that will break ground thanks to close to $180 million in joint federal and provincial funding. The Governments of Canada and British Columbia have taken steps to get shovels in the ground and to flow money faster for targeted infrastructure projects starting in the 2009 construction season.

The projects are funded under the Province’s three-year, $14-billion capital infrastructure program, which will create up to 88,000 jobs and help build vital public infrastructure in every region of B.C. To date, over $4.1 billion has already been announced for projects across British Columbia, which will create an estimated 26,000 jobs.