VANCOUVER – Simon Coutts has sold 200 fewer bicycles in the past year since British Columbia unceremoniously rolled in the harmonized sales tax.
Everything from helmets to safety equipment in his downtown Vancouver shop jumped in price with the addition of the seven per cent provincial tax, because cycling gear had previously had a rare exemption.
Word raced into Simon’s Bike Shop on Friday afternoon when Elections BC revealed a grassroots campaign to put the brakes on the tax was victorious.
“We’ve had people phone to tell me that they’re seriously, so happy they can come in and get their bike and accessories,” he said.
“I’m so excited, I can’t wait for them to change it back.”
But Coutts’ elation was the minority view amongst small business owners, many who were sharing an exasperated sigh as they contemplated the ramifications of turning back the tax clock.
Some 55 per cent of 1.6 million British Columbians who voted in the mail-in referendum told the government to give the HST the heave-ho.
Reprogramming computer systems, re-working arrangements with suppliers and distributors, toying with pricing and wading through double the paperwork were all weighing heavy on longtime establishments that had benefited from the unified tax.
“Well that was a big waste of money, and it will be another future waste of money. I’m quite disappointed,” said Anthony Crosfield, co-owner of Union hair salon in a trendy district of the city.
“I know the approach to the HST was a little underhanded in people’s eyes. But I think the application, once it was in, it was starting to go ahead. And having to undo all (that’s been) done is just going to be a massive expense.”
He said customers had shied from getting cuts and colours as frequently, as well as skimped more freely on stylist’s tips, once the combined 12 per cent tax was implemented in July 2010.
Yet even with a 20 to 25 per cent fluctuation in business, Crosfield made adjustments and came out believing the tax was worth the trouble.
“I think there wasn’t a real full understanding (from) people, they were all bitter about it personally, nobody was approaching it from a business perspective,” he said, noting he does expect customers to be pleased with the results.
At the landmark Bridges Restaurant, which serves up to 300 people at once on its touristy Granville Island patio, chief executive officer Peter Horwood said his restaurant underwent renovations while the HST was in place and he was able to claim back the provincial portion of the tax.
He wouldn’t be able to do that under the returning tax regime.
Customers had dwindled in the first few months of the HST’s introduction, but they had eventually accepted it, Horwood said.
“I don’t think there’s going to be a big rush, a stampede of consumers coming back spending extra,” he said of the reversal, which is expected to happen within about 18 months.
Chris Brayshaw, owner of indie-favourite Pulpfiction Books, is now pondering how he’ll sustain the thousands of dollars in reinvestments he made at his two locations. He had hired an additional staff member and selectively lowered prices on certain items to be competitive with U.S. book pricing, he said.
“I know a lot of small businesses are portrayed as just taking any tax savings and sticking them in their pocket, but that certainly wasn’t the case here,” he said. “We invested it and grew the business.”
The reaction was mixed amongst office workers buying a quick lunch from food trucks in downtown Vancouver, depending on whether they had business ties.
“I think (the result) reflects the public’s disgust for it, how it was introduced without public consultation,” said Charlie Jung, 31. “It reflects what people really wanted, and at the end of the day they’ll get what they want.”
Sharon Hummel, 36, was pleased her vote to defeat the tax counted.
“Personally I think I will save some money without those extra charges, but I am apprehensive,” she said. “Because they’re going to have to make up for the money they’re losing.”
Local news from metronews.ca/vancouver
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