Province clarifies PST cut impact on heavy construction industry
The heavy construction industry will see a ‘savings’ of $15 million when the PST is cut from 8 to 7%, the provincial government has clarified.
The $15-million figure is calculated based on taxes paid in 2015.
But 2015 was a robust road construction year, with the provincial government’s actual expenditures hitting a record high of $628 million. The provincial government’s actual expenditures in 2018 on highways capital projects are expected to be approximately $340 million, according to the 3rd quarterly report.
At a Manitoba Chamber of Commerce breakfast April 18, Premier Brian Pallister said the heavy construction industry was expected to benefit by $61 million from the PST cut, which is to take effect July 1.
However, the figure was supposed to be $51 million, and the benefits are spread across the broad construction industry, of which heavy civil is a fraction. That figure, too, is derived from 2015.
“Selecting 2015 as a base for calculating PST paid by the heavy construction industry is not useful, because the volume of work and the budget levels were so much higher,” MHCA President Chris Lorenc said. “That was a record year for the highways capital program.”
Further, Lorenc noted, the PST paid is simply passed directly to the client, the owner of the infrastructure project, including the City of Winnipeg.
Meanwhile, the provincial government has issued the transitional rules for the PST reduction for vendors making taxable sales, and purchasers who remit sales tax directly to the Taxation Division. Click here for details.
