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Jewelry no longer a luxury

Andrea Markey
Northern News Services

Yellowknife (June 22/05) - The 87-year-old luxury tax on jewelry may soon be a thing of the past, much to the relief of bauble merchants around the city.

NNSL Photo/Graphic

Hau Huynh, co-owner of Arctic Jewellers, says the 10 per cent excise tax is not fair to Canadian jewellers or consumers. The diamond ring he's holding retails for more than $11,000 - making the potential savings more than $1,100. - Andrea Markey/NNSL photo

Bill C-259, a private member's bill calling for the removal of the 10 per cent federal tax, was passed by the House of Commons last week in a lopsided vote of 185 to 93.

If approved by the Senate, the bill will immediately remove the tax, rather than the incremental phase out by 2009 proposed in February as part of the federal budget.

Jewellers are hoping the bill moves swiftly through the Senate - although there is no set timetable for when that will happen.

John Probe, the new owner of Eldonn Jewellery, was happy to hear the tax is almost gone.

"As prices go up, the tax is a constant and therefore the amount of tax increases with the price," he said.

"If the tax was to be phased-out, in theory, it could be changed, modified or put off."

Hau Huynh, co-owner of Arctic Jewellers, said eliminating the tax will help his business and others like it in the city.

"Tourists will notice the price is lower than last year," he said. "Ten per cent is a lot off the total price of jewelry."

It is not fair to force people to pay a tax on Canadian diamonds in Canada making the price on them cheaper than in the U.S., he said.

Western Arctic MP Ethel Blondin-Andrew voted against the bill.

More than one way

"Both Bill C-259 and the budget will have the same end result," she said.

"It simply makes more sense to eliminate a $150 million per year tax in a well thought out way."

In addition, there were already 15 private member's bills before the House of Commons totalling $2.5 billion, she said.

"The public would not see kindly if this was not done through the budgetary process," she said.

Great Slave MLA Bill Braden has been a long-time supporter of slashing the excise tax.

"One could argue that this is no small amount of money and phase-out would be fine," he said.

"But the tax was doing nothing for job creation or keeping jobs."

Canada, Northern jewellers and mining companies, can now operate on a level playing field, he said.