How will the higher sales tax proposed by the transit referendum affect students with limited income?
Kin Lo, a Sauder professor with a background in tax policy, is in support of the transit referendum. He believes that, especially for students, the transit referendum will invest into necessary infrastructure that will benefit all citizens of Metro B.C. in the future.
From March 16 to May 18, residents of Metro Vancouver will vote in the mail-in transit referendum, will proposes a 0.5 per cent increase to provincial sales tax in order to fund a 10-year plan for improved transit service. Some of those increases include the construction of the Broadway Line, increased light rail services in Surrey and Langley and expanded bus routes.
According to Lo, the reason for some of the opposition to the referendum has to do with the fact that the changes will be implemented over several years, so the benefits may not be as clear as the immediate extra costs associated with the sales tax.
“The benefit is long term, but there is a mismatch between the time that the cost is paid and the benefits reaped,” said Lo.
Lo also said that the opposition to the referendum has chosen to focus on specific concerns related to those who support the referendum, which has served to derail a conversation on transit change that Vancouver desperately needs.
“Issues like executive compensation have become a battleground. Issues like the failure of the Compass Card system and the recent failures of the SkyTrain have come at terrible times for the transit referendum,” said Lo. “These events make it a really awkward time to hold [the referendum].”
Though Lo admits that this year has been troublesome for the public image of transportation in Vancouver, he believes that the benefits and need of the proposed changes are positive overall. He also said that while companies that fall within the 7.5 per cent taxation border would have a small competitive disadvantage when compared to those outside the seven per cent zone, this would be only minimally felt.
According to Lo, a more substantial threat that the taxation policy will bring is in the form of further solidifying the distinction between GST and PST in B.C. He believes that should B.C. choose to harmonize the GST and PST, policies like this one would create complications in that process.
“I don’t know whether having a different tax rate will be a hindrance in the harmonizing process,” said Lo.
Still, he said that as the increase in sales tax will fund essential transit services, people should vote yes to the increase.