Sales in the province have also been subject to the federal Goods and Services Tax (GST) since its introduction on 1 January 1991.
Tax exemptions included: unprocessed food, restaurants, motor fuel, children's clothes and footwear, goods purchased for resale or export, goods used in the manufacturing or production of an end use product, legal services, massage therapy, vitamins, repair services, and taxis.
Similar to the old PST, the following are not taxable under the new PST: the sales of real property such as residential housing or commercial real estate; admissions, registrations, and memberships; professional services (other than legal services); and transportation fares (e.g. bus, train, ferry, airline).
The HST added an additional 7% of sales tax to the following items:[6] The HST lowered the sales tax on the following items:[6][7] Some people believed that the HST would generate significantly more revenue, because while the PST revenue was estimated at $5.083 billion for 2009/2010, several sources concurred and estimated a 5% GST revenue for British Columbia of about $5 billion (or a tax base at about $100 billion after the current GST exemption concerning the public sector).
If the taxable base were roughly the same, this would result in approximately $7 billion in BC HST revenue.
It did not take into account the additional transition payment of $1.6 billion provided by the federal government as a consequence of the HST adoption, and collection cost saving estimated at $30 million.
The Memorandum agreed between the provincial and the federal government gave the former the flexibility to The Memorandum seemed to prefer the second path by suggesting exemption of motive fuel, children's clothing and footwear, children's car seats, feminine hygiene and books.
[5][13][needs update] Rather than decrease the rate of the HST across the board, the provincial government chose to favour some special interest group industries, which received some criticism; some noted that the discretionary exemptions defeated one purpose of the HST: tax harmonization, with cost-saving achieved by red-tape reduction.
The HST shift appeared to benefit mostly the capital-intensive multinational industries such as mining and forestry in BC.
The government chose to exclude most of the labour-intensive service industry from HST tax relief, and appeared to favour the rural BC interior over the urban area ridings.
A report done for the BC Ministry of Finance by University of Calgary economics professor Jack Mintz predicted that moving to the HST would create 11,300 jobs per year, increasing employment income by around $333 million, and result in capital investment of $1.15 billion/year.
Introducing the HST added a new taxation of 7% for numerous health-friendly activities, such as purchasing bicycles, fitness and gym club memberships, and ski passes.
On 26 August 2011 Elections BC, the independent electoral overseer, announced that British Columbia voters defeated the new tax in the binding referendum conducted in June and July 2011 via a mail-in ballot.