Phasing Out PST on Electricity for BC-Based Commercial Customers
urrent British Columbia commercial customers are being charged 7% PST on their electricity bills. This 7% plays a huge impact on the overall operation cost on the B.C. commercial businesses. There is currently a plan to phase out PST on electricity by April 2019 for commercial customers.
The changes to PST on electricity affects both Private and Public sector businesses.
Public Sector
- A decrease in utility cost
- Costing saving measures
- Fundings could be used in other aspects
- Public sector companies include:
- Hospitals
- Municipalities
- Schools
Private Sector
- A decrease in utility cost
- Costing saving measures
- Reinvestment:
- Salaries
- Equipment
- The hiring of new employees
- Training programs
- Increase in profits from reinvestment of extra cashflow
PST on Electricity
The above image was taken from the BC Budget 2017
The estimated PST electricity costs for BC business in 2015-2016 are:
- $51 million – Large Business
- $50 million – Small and Medium Size Businesses
- $49 million – Large Industrial Users
- $14 million – Government
The totals estimated cost for all the sectors is $164 million.
The government is in support of the change to PST on electricity. This change will decrease the amount of PST collected but will help grow a stronger economy.
As mentioned in our previous blog, 80% of the cost for a crypto mining operation is related to electricity.
BC Budget 2017 – PST reduction on electricity
The reason for the phase-out of PST on electricity for commercial customers is to make B.C. based companies more competitive, preserve existing jobs and to promote the use of eco-friendly energy.
The pulp and paper industry is heavily affected by the PST on electricity. The PST on electricity accounts for 1.8% of their overall cost. The 1.8% can be a deciding factor in profit and loss
As of October 2017, the government has already decreased the commercial PST rate on electricity from 7% to 3.5% and plans to completely phase it out by April 2019.
MiningSky is working diligently alongside local governments to make sure the phase-out of PST happens before or by April 2019 and isn’t delayed further.
Effect on Cryptocurrency
Bitcoin, one of the biggest cryptocurrency, had huge a fluctuations during the past half year; peaking at $19,783.21 USD but dropping back down to $7,932.25 (as of April 17, 2018). This huge fluctuation in price will heavily affect the profit margin from each of the mining rigs.
For a user to increase the profit margin on a mining operation, he/she would need to look into cost saving measures. One cost saving measure is the variable electricity cost. Electricity cost varies based on who uses it (personal or commercial), volume and provider (public or private sector power plant). For most situations, the price isn’t negotiable for many hosting farms but with MiningSky’s ongoing relationship with the local government and power plants, they are able to allow its clients access to low price electricity.
