Victoria’s proposed crackdown on tax-evading consumers has Atlin residents worried.
The tiny northern village of 450 people doesn’t know how it will cope if the BC government somehow manages to tax purchases they make in the Yukon.
This would make life in the frontier community a little harder, said George Holman, chair of the Atlin Board of Trade.
It depends on the territory for most of its goods and services, he said.
“It’s natural for us to go out to Whitehorse to get fresh veggies and stuff,” he said.
The scheme, floated by BC’s department of Small Business and Revenue, is designed to catch tax revenue currently lost in sales to tax-free Alberta.
The interprovincial trade issue has been in headlines across the nation over the past few weeks.
It became public after Costco squared off against Victoria in the BC Supreme Court.
The Man wants the retail giant’s membership records so it can pinch BC residents who are dodging the provinces’ seven per cent retail sales tax by shopping in Alberta.
The move breaches privacy rules, charges Costco.
Gordon Campbell’s Liberal government cites tax laws that state businesses must assist in the prosecution of tax evaders.
While the BC government seemed to be gearing up to crack down on people who avoid paying the seven-per-cent provincial sales tax, there will be an announcement on the issue today, said Theresa Lumsden, a spokesperson for the Small Business and Revenue department.
By press time, the department had not commented on the cross-border tax issue.
While Alberta Costco stores are far from a daily reality for Atlin residents, a government crackdown on out-of-province shopping would certainly affect their lives.
“The big thing they were yodeling about was bringing cigarettes in, and tobacco products and liquor across the Yukon border,” Holman said.
“Well, you know, there’s a lot of stuff we can’t get here, the price is so high.”
Holman is the unofficial mayor of Atlin who jokes that he’d gladly step down, but there’s no one willing to step up.
As well as being chair of the board of trade and the owner of a pet store, Holman is the bus driver, a job that brings him into the Yukon on a regular basis.
Three times a week, Mondays, Wednesdays and Fridays, Holman passes through a number of towns in the southern Yukon, like Jake’s Corner, Tagish and Carcross, en route to Whitehorse.
As well as ferrying passengers into the territory’s capital city, he also carries light freight and picks up the mail.
“What are they going to do, put a border guard at the Yukon border?” he asked.
“It’s just ridiculous, a stupid imaginary line.”
Taxes on goods and services are only the tip the iceberg, he added.
There is also a problem with services themselves.
For example, there are no local veterinarians.
However, licensing someone to be a veterinarian is a provincial or territorial responsibility. This means that veterinarians from the Yukon are not allowed to practice in BC.
“I can’t believe a (veterinary) association can make a rule that affects us all the way up here,” said Holman.
“No matter what we’ve done to try to change it, they’ve got their heels dug in.”
Stricter rules might make a difference for individuals who shop in the Yukon, said Atlin business owner Sheldon Sands.
It won’t affect his business though.
“As a business owner, anything we buy in the Yukon, or wherever we buy it outside of the province, we remit the tax on our monthly tax form,” he said.
“Otherwise they come in. It could be five years from now. If they audit it, and it hasn’t been paid, then you pay penalties on not having paid it.”
Sands owns a fuel and construction materials business called Pine Tree Services.
While the scrutiny might encourage residents to shop locally, there are products that simply can’t be purchased in Atlin, said Sands.
The winter brings particular challenges as well, according to Holman.
“The general store closes for the winter, so there’s nowhere to get plumbing supplies or anything like that,” said Holman in a phone interview from Atlin.
“The services too are coming across the border. What are they going to do about that?
“All the refrigeration and everything else has to be done by trades people out of the Yukon we don’t have them here.”
The crackdown is partially in response to a request from businesses along the Alberta border, said Sands.
Businesses in that region wanted a lower tax zone to be more competitive with stores in the adjacent province.
This is not a viable plan, said Rick Karp, president of the Whitehorse Chamber of Commerce.
“Where is the line going to be drawn? It’s going to spread through the whole province then they’re going to lose their seven per cent sales tax.”
BC is approaching the issue backwards, said Karp.
If BC wants to be competitive, it should lower its taxes to rival Alberta or the Yukon.
“The answer is, just forget the seven per cent sales tax and people are going to spend more.”
Atlin was on the forefront of Karp’s mind.
“We’ve got some communities, like Atlin, that come in here to shop all the time,” he said.
“What are they going to do? Are they going to start going after them as well?”
A long-term worry is that BC will start charging retailers from outside the province taxes on imported products.
This would jack up prices in Whitehorse and likely lead to retailers turning to Alberta for imports, said Karp.
“It just seems to me here we go with Big Brother again,” he said, noting there is no way the issue would stop with Costco.
As far as Holman is concerned, emphasizing provincial and territorial borders is a government cash cow.
“Here we are, one country with a bunch of provinces and a couple territories,” he said.
“We’ve got these imaginary lines that you can’t cross because you’re not licensed in each one.
“I think it’s just a money grab.”