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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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New B.C. sales tax rules go into effect July 1 for online marketplaces like Amazon, eBay – Vancouver Sun
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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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.
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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
Companies in this story: (TSX:ROOT)
The Canadian Press. All rights reserved.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
The Canadian Press. All rights reserved.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Companies in this story: (TSX:TRZ)
The Canadian Press. All rights reserved.
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