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New B.C. sales tax rules go into effect July 1 for online marketplaces like Amazon, eBay – Vancouver Sun

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Online marketplaces with annual gross revenues of more than $10,000 — hello, Facebook and Amazon — will be required to collect the provincial sales tax on goods and services sold on their sites

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Starting July 1, British Columbians could be paying more for goods they buy through online marketplaces such as Facebook and Amazon.

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That’s because the B.C. government has made changes that require these online marketplaces that have annual gross revenues of more than $10,000 to collect the provincial sales tax on goods and services sold on their sites.

It shifts the responsibility to companies like eBay and Amazon to collect the PST, rather than the small businesses that may use a marketplace facilitator site to sell their products, according to the B.C. finance ministry.

In addition, these marketplaces are also being required by the province to charge PST to individual sellers for use of their services, such as help with listing the sales of goods, advertising, warehousing and payment collection.

It’s the latest move by the province to create a more even playing field for online operations that continue to increase their share of the economy.

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The B.C. government expects the PST rule changes will generate an additional $100 million in revenues this fiscal year and $120 million the following year.

The Retail Council of Canada, which has offices in B.C., says the move to treat online marketplaces the same as brick-and-mortar stores makes sense because it puts businesses on an equal footing.

But the addition of the PST for services purchased by sellers in B.C., often small businesses, will simply add costs for consumers here and make local sellers uncompetitive as other jurisdictions in Canada have not introduced a similar measure, said Karl Littler, senior vice-president of public affairs for the Retail Council of Canada.

“It doesn’t exist anywhere else. It’s a new tax between a marketplace facilitator, like an Amazon or like a Best Buy or like a Facebook, and somebody who’s selling goods,” said Littler.

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The council is concerned that small B.C. merchants will be paying seven per cent on these online marketplace services, irrespective of whether the end-customer is in B.C. or elsewhere. This will make them less competitive versus other businesses operating in other North American jurisdictions.

In B.C., people who buy goods and services through online marketplaces will be charged the PST on top of the now higher-priced goods themselves, a sort form of double taxation, argued the retail council.

As well, the changes serve as a disincentive to marketplace services to locate facilities, and thus jobs, in B.C., says the retail council.

In a written response, finance ministry officials said the application of the PST to marketplace services attempts to keep pace with the changing digital economy.

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There is no explicit breakout for the tax on services from online marketplace facilitators, but in an email the ministry said it expects it to account for less than 10 per cent of the estimated additional $100 million in tax revenue that will be collected.

Werner Antweiler, a professor in the Sauder School of Business at the University of B.C., said having online marketplaces collect the PST on goods and services closes a loophole in taxation and helps collect tax from sellers abroad.

What’s different about B.C.’s approach is the inclusion of the PST on online marketplaces services provided to online marketplace sellers, said Antweiler.

It may be that other provinces or the federal government will follow suit, but this new rule may disadvantage online facilitators setting up in B.C., as B.C. would be hard pressed to enforce tax collection outside its own jurisdiction, even in another province.

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“There is a trade-off. While the economic rationale to tax all services, including online marketplace services provided to sellers, is sound, B.C. going this alone puts B.C. at a disadvantage,” said Antweiler.

In 2020, the B.C. government introduced new rules that required sellers of software and telecommunications services, such as Netflix, had to collect the PST.

That measure was expected to generate $11 million in new tax revenues in 2020-21 and $16 million in 2021-2022.

ghoekstra@postmedia.com

twitter.com/gordon_hoekstra


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Toronto continues investigation into cause of massive power outage – CP24

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Hydro One says it will take “several days” to repair hydro lines that were damaged after an upright crane in the lake slammed into them and caused a massive power outage downtown on Thursday.

The outage occurred in the city’s financial district at around 12:30 p.m., leaving approximately 10,000 customers without power at its peak.

A portion of the Eaton Centre was left in the dark, forcing hundreds of stores to temporarily close. The outage also knocked out power in parts of the Hospital for Sick Children’s campus.

Traffic lights were down in some intersections causing heavy traffic and significant streetcar delays. However, the outage did not affect subways.

Toronto Fire said crews responded to a number of elevator rescues, but no injuries connected to the outage were reported yesterday.

Hydro One says the outage was caused when a barge moving an upright crane in the Port Lands area hit overhead high voltage transmission lines.

“Now, what happened when that crane hit the line resulted in a downstream effect where a surge of power affected a nearby station on the Esplanade that we were actually using to reroute power to Toronto Hydro,” Hydro One Spokesperson Tiziana Baccega Rosa told CP24 Friday morning.

The City of Toronto says the barge was being operated by a subcontractor to Southland-Astaldi Joint Venture (SAJV), which is a contractor for the Ashbridges Bay Treatment Plant outfall project.

Crews were reportedly preparing to move equipment into the lake for the project when the incident occurred.

“We’re going to use stone that needs to be placed out in the lake and the subcontractors were going to do that work for us but they were moving equipment. The event occurred off-site while they were doing their preparatory work,” Lou Di Gironimo, Toronto Water’s general manager told CP24 Friday.

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Baccega Rosa said Hydro One crews were able to reroute about 50 per cent of the power shortly after the incident, which resulted in power being restored in some areas quicker than others.

Crews then had to stop their efforts and wait for the fire department to clear the site for workers to safely enter and reroute the rest of the power.

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Once crews gained access, they were able to reroute all power to Toronto Hydro and power was fully restored downtown by 8 p.m.

Baccega Rosa said there are established safety protocols to stay a minimum of 10 metres away from power lines, which were not followed yesterday.

“And that’s (for) anyone whether, you know, you’re a barge passing under them (power lines) or if you’re doing work around your house and you need to trim the tree branches around the line connecting your home. You know, everyone was very lucky yesterday that there was not a safety incident and no one was hurt as a result of this,” she said.

The city has launched an investigation into the incident and has requested a full report from SAJV to understand what happened.

“So the big thing that we’re going to look at is what happened? Who was in charge of the subcontractor work? What were the safety procedures in place at the time? And then what exactly happened when the crane hit the wires?,” Di Gironimo said.

Di Gironimo could not confirm if the subcontractors will face any consequences for the incident.

“That will be part of the investigation to find out what happened. What were those precautions that were supposed to be in place. What was followed? What wasn’t?”

He said the city is meeting with SAJV next week and plans to complete the investigation within a matter of weeks.

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B.C. couple still owes $19M despite bankruptcy, appeal court rules – Business in Vancouver

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B.C. couple still owes $19M despite bankruptcy, appeal court rules – Economy, Law & Politics | Business in Vancouver


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​Rogers, Shaw formalize planned Freedom sale to Quebecor – BNN Bloomberg

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Rogers Communications Inc., Shaw Communications Inc. and Quebecor Inc. announced Friday they reached a definitive agreement for the previously-announced proposed sale of Shaw’s Freedom Mobile wireless business.
 
The three companies said that the terms of the definitive pact are “substantially consistent” with their original announcement on June 17, when they said Montreal-based Quebecor agreed to pay $2.85 billion to purchase Freedom. Originally, July 15 was the target to reach the definitive agreement.  

“We are very pleased with this agreement, and we are determined to continue building on Freedom’s assets,” said Quebecor president and chief executive officer Pierre Karl Péladeau in a release Friday. “Quebecor has shown that it is the best player to create real competition and disrupt the market.”
 
The transaction is conditional on Rogers receiving final regulatory approvals for its planned $20-billion takeover of Shaw, which was announced in March 2021.
 
The road to regulatory approval has become more treacherous for Rogers after Competition Commissioner Matthew Boswell stated his objections to the plan, warning it would diminish competition in the telecom market, notwithstanding Rogers’ long-stated intent to divest Freedom Mobile.
 
Rogers’ legal counsel has argued vociferously against Boswell’s claims, saying in a June 3 filing with the Competition Tribunal that Boswell’s stance “is unreasonable, contrary to both the economic and fact evidence presented to the Bureau, and not supportable at law.”
 
The Competition Tribunal is currently scheduled to begin a hearing on the matter Nov. 7.
 
Rogers also has to clear another regulatory hurdle: its planned acquisition of Shaw requires approval from Innovation, Science and Industry Minister François-Philippe Champagne, who has previously said he won’t allow the wholesale transfer of Shaw’s wireless assets to Rogers.
 
The process became more complicated for Rogers after a national network outage knocked out service to its customers in early July.

Champagne subsequently said the outage would “certainly be in [his] mind” when weighing the merit of the Shaw sale.
 
For its part, the Canadian Radio-television and Telecommunications Communications announced its conditional approval of the transaction in March.
 
Shaw investors have consistently demonstrated skepticism that the deal will go ahead as planned, as evidenced by its shares never once attaining the $40.50-per-share takeover offer from Rogers since the takeover was announced last year.

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