Whistler businesses bracing for HST impact 

Most likely to pass additional seven per cent tax on to consumers

With just three months to go until the Harmonized Sales Tax takes effect, many companies in Whistler still aren't clear exactly how the new rules will impact their business.

Managers from real estate companies, hair salons and gyms said in general they are still in the dark about exactly what the new system will mean for them.

"The bottom line is we are all just getting educated," said Ann Chiasson, president of Re/Max Sea to Sky Real Estate.

"It will definitely impact various segments of the real estate industry, but until we have an opportunity to meet with tax experts, it is probably not a good idea for us to say too much at this point.

"It is going to affect new product, we know that, but I haven't been to a course on it. I am just getting what you are getting by reading the newspaper."

Across town, Emanuela Bertoia, owner of Farfalla Hair & Esthetics, compared waiting for the new tax to the Olympics: until it takes effect on July 1, it will be impossible to understand what the impact of the HST will be.

"I think it is really important to go with the flow," she said.

And Trina Cooper, assistant manager with Whistler Creek Athletic Club, said she hasn't even spoken to her owner about the impact of the new tax system yet.

"I haven't really thought about it yet," said Cooper. "I will be talking to him soon though."

Last July, the provincial government announced that they would be harmonizing the five per cent federal Goods and Service Tax (GST) and the seven per cent Provincial Sales Tax (PST) into a single HST tax at 12 per cent.

The new tax system will be revenue neutral, provincial government authorities have said.

The most visible impact of the HST will be the additional seven per cent tax charged to services, which unlike goods, have largely been exempt from the PST.

For example, things like restaurant meals, movies and other entertainment, haircuts, dry cleaning services, gym memberships, lift tickets, green fees, tours and professional services with accountants and lawyers will see a seven per cent tax increase.

Books, diapers, children's clothing, feminine products, and gasoline and diesel fuel for cars, however, won't be affected.

"The vast majority of our business is our tours and, yes, that is going to see a seven per cent price increase effectively as a result of the tax going from five per cent to 12 per cent," said Dave Udow, owner of Ziptrek Ecotours.

"Our posted rates will be the same, but when a customer comes to actually pay, unfortunately, they are gong to have to pay a bit extra."

Udow is trying to focus on continuing to deliver good value to his guests, and he is hoping the new tax won't deter people from booking, but "it remains to be seen, of course."

He added with a laugh, "If anyone wants to come out before July 1, it will be seven per cent cheaper."

Jordan Glasser, owner of Crossfit Whistler, echoed Udow's sentiment.

"I wish it weren't coming, but it is, and I guess we are prepared to ride the wave," he said.

"The black and white is that we are either going to absorb the costs by lowering prices or keep our prices the same and have clients pay a bit extra. I guess we are going to let the chips fall where they may."

Whistler Blackcomb has also launched a campaign to encourage people to buy their 2010/2011 season pass before April 25 to avoid HST and save seven per cent.

A spokesperson from Whistler Blackcomb was not available for comment before deadline.

Since the tax was announced, opponents across the province have organized rallies, protests and petition to voice their concern. Among those opposed is former premier Bill Vander Zalm.

Chris Quinlan, the president of the Restaurant Association of Whistler and a Whistler Councillor has also spoken publicly about how the HST will negatively affect the restaurant business.

On Tuesday, Quinlan said the simple fact of the matter is that all restaurant food and drinks will now have a 12 per cent tax tied to them.

"When it comes in, we have to increase the tax we charge," he said. "We can't put our prices down or change our program at all."

The Restaurant Association of Whistler has not yet taken an official position on the issue, but members are sharing information about the HST with each other.

"It would be great to say we have been rallying the troops and fighting it, but it is not something we have been able to spend a lot of resources on," said Quinlan.

Meanwhile, to help businesses get a leg up as HST approaches, the Certified General Accountants Association of British Columbia (CGA-BC) recently published an information guide.

Copies of the guide can be obtained by contacting the accounting organization.

 

 

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