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HST decision 'huge disappointment' says agriculture sector

The B.C. agriculture sector is expecting to lose out when the province returns to the GST/PST system.

The B.C. Agriculture Council advocated in favour of the HST and chair Andy Dolberg called the harmonized sales tax "the single biggest benefit" that the industry has seen from government in many years.

"The HST was implemented poorly, we recognize that," said Dolberg, who estimated that the shift back will cost the industry $15 to $20 million.

Under the old system, farmers were exempt from PST at the point of sale for certain farm-related equipment and supplies. Under the HST system, farmers paid more tax at the till but were able to apply for investment tax credits for more of those farm-related items.

"A perfect example is of a farmer building a new milking barn," said Dolberg. "The milking machines inside would be exempt from PST, but the two-by-fours would not."

Under the HST system, said Dolberg, the farmer could claim investment tax credits for the entire cost of the barn.

However, Mary Forstbauer, a farmer in Chilliwack, said she's happy to see the HST go. She is the spokesperson of the Certified Organic Associations of B.C. which decided not to take a position on the HST. She said for herself, and other small farmers, it made more sense to get a PST discount at the till then to have the extra accounting costs and headache of applying for tax credits.

Forstbauer also said she didn't like how the HST was implemented, and was concerned that it hit low-income people the hardest. "I look at the bigger picture," she said. "Those people who had to pay seven per cent more, their income didn't go up."

Colleen Kimmett reports for The Tyee.

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