A major development in the winding down of the HST: the BC government has reached an agreement with the feds on the orderly repayment of that $1.6-billion signing bonus. Full text of press release, below. Now, if only Victoria can provide a firm date on when the HST will actually end.
Jan. 11, 2012
Ministry of Finance
Terms agreed for repayment of B.C. HST transition funding
VICTORIA - The Province has concluded an agreement with the Government of Canada for the orderly repayment of the $1.6 billion in transition funding it received when B.C. moved to the Harmonized Sales Tax, Minister of Finance Kevin Falcon announced today.
Under the new agreement, the Province will have five years to repay in full the transition funding, and Canada has agreed to waive any interest charges over this period. While the Province has always acknowledged its responsibility for the repayment of the federal transition funding, the actual timing of when that repayment was to occur remained something for B.C. and Canada to further discuss.
The extended repayment schedule will save the Province debt interest costs that would otherwise have been incurred had the Province had to pay back the full amount right away-money that can instead go toward protecting core B.C. services.
The full cost of the $1.6-billion repayment will still be booked in the provincial's government's 2011-12 fiscal year, but the Province will instead be able to flow the cash over the coming five years.
Falcon will be available to comment to media at 11:15 a.m. at the Premier's Vancouver Office (999 Canada Place).