VICTORIA - British Columbia will cut its harmonized sales tax by two percentage points in an effort to win a referendum on whether to keep the levy.
Finance Minister Kevin Falcon says if voters in the mail-in referendum decide to keep the HST, it will become 10 per cent by July 1, 2014, down from the current 12 per cent.
Falcon says the cuts will be made to the provincial half of the harmonized tax, effectively dropping it to five per cent from seven.
Another sweetener is a pledge to issue one-time cheques this year of $175 to families for every child under 18 and to low- and modest-income seniors.
But Falcon also noted the government remains committed to balancing its budget by 2013-2014, and he notes every percentage point the government knocks off the HST costs about $850 million in revenues.
That means the money must be made up somewhere else, and to defray the cost, the government will cancel a corporate income tax cut planned for January 1, 2012, and postpone a proposed small business tax cut slated for April 1, 2012.
