British Columbia harmonized its provincial sales tax (Social Services Tax, aka PST) with the Federal goods and services tax (GST) effective July 1, 2010. The Consumption Tax Rebate and Transition Act, which eliminated the PST and prepared BC for the HST, was passed in the BC legislature on April 29, 2010.
Effective April 1, 2013, BC's 12% HST was replaced by the GST and the PST. As a result, the BC basic personal amount tax credit was reduced for 2013 (eliminating the increase that was done due to the implementation of the HST), the quarterly HST credit was eliminated, and the refundable Sales Tax Credit was reintroduced. See the BC 2012 Budget page for more information on these items, and for information on the increased HST rebate threshold for new home purchases.
Our BC PST page has information regarding the PST
See our article on Why the HST is good for BC.
The previous PST rate in BC was 7%, which, when combined with the GST resulted in a harmonized sales tax (HST) rate of 12%.
The implementation of HST in BC would be good for the economy, which would be good for job-seekers and consumers. It removes a consumer tax (PST) which is costly for businesses and government to administer. Even a small business (such as a self-employed person) which is not required to register to collect GST has to register to collect PST if it sells or provides over a certain amount of a product or service which is subject to PST. The government has auditors who must audit businesses, businesses have accountants who must report on and remit the tax, and too often, lawyers and the courts are brought into the picture because the Social Services Tax Act has many parts that are open to interpretation. The implementation of the HST would eliminate an entire level of bureaucracy, which is always a good thing!
There would be a slight increased cost to consumers to start, but because this is a consumption tax, those who spend the most will pay the most. Those with low incomes will be affected the least, because they spend the least, and a higher proportion of items purchased by low-income people are not subject to HST, such as basic groceries, housing, residential energy, and insurance.
Another advantage of going to HST is that tax will no longer be payable on most used goods purchased privately. However, used vehicles, aircraft and boats purchased privately (not from an HST registrant) would still be subject to provincial sales tax, which is being increased from 7% to 12%. If an HST registrant purchases a used vehicle privately, the 12% PST paid on the transfer of the vehicle is not recoverable as an input tax credit.
Almost everything that was subject to PST when purchased new was also subject to PST when purchased used. Exceptions to this were used clothing or footwear priced at less than $100, and certain used manufactured homes. Most people were not aware that the Social Services Tax Act required them to remit the tax to the government when they bought used goods privately, or when they purchased something from an out of province seller. We would guess that most people didn't remit the PST on this type of item, and were therefore in contravention of the Social Services Tax Act.
Businesses which are registered to collect GST or HST can claim input tax credits to recover the GST or HST that they have paid. A change to HST would mean a significant savings and boost in productivity for businesses in BC, because:
Farmers are exempt from paying PST on the cost of many items purchased for use in the farming business. If a farmer were registered to collect GST/HST, any HST paid on costs for the farming business would be recoverable as input tax credits. As most agricultural products are zero-rated (they are considered taxable, but the HST rate is zero), very little or no HST would be collected. Many farmers are small suppliers, so registering to collect GST/HST is not mandatory, but could be to their advantage in order to recover HST paid. See Who has to register to collect GST/HST?
Revised: December 07, 2025