The HST: keep it or ditch it?

By David F. Rooney

You’d think the BC Liberals would have learned their lesson after the political fallout of  last year’s petition against the Harmonized Sales Tax. Public reaction was so extreme that it helped force Gordon Campbell to resign as premier.

Now his successor, Christy Clark, is asking British Columbians to accept the tax and, if they do, she promises to reduce it by two per cent over two years. An increase in corporate taxes would make up for the shortfall under her plan outlined on Wednesday.

Newspaper reports from a news conference in Victoria on Wednesday quoted Clark as saying she heard from British Columbians that the tax wasn’t fair. “We are going to rebalance the burden between big business and consumers,” she was quoted as saying. “Lots of families will be better off.”

Clark says all British Columbia families will benefit from these changes and, on average, pay less on their routine expenditures under the 10 per cent HST than going back to the PST and GST. To help offset the costs of the HST before the rate reduction in 2012, one-time transition cheques of $175 per child would be issued to families with children under 18 years old. In addition, low- and modest-income seniors will receive a one-time transition cheque of $175. The cost of the transition cheques is expected to be $200 million, and they will be issued by the end of the year. (Please scroll to the bottom of this story if you’d like to see a video Premier Christy Clark making her announcement.)

However, 700,000 British Columbians signed last year’s petition calling for a referendum on the HST and Columbia River-Revelstoke MLA Norm Macdonald said the people of BC can’t afford to trust the BC Liberals on this issue.

“British Columbians believed the BC Liberals when they said they would not bring in the HST.  That was the first HST promise broken by this government,” Macdonald said in a statement.  “And now the BC Liberals are making more promises about the HST.  Can voters really trust that this time the BC Liberals will do as they say?”

None of Premier Clark’s HST promises will come into effect prior to the referendum when voters will be asked whether or not to extinguish the HST.

“If the BC Liberals really believed that the promised ‘new and improved post-referendum HST’ was the right direction to go, they would have made these adjustments before implementing the tax in 2010.  The truth is, they are desperate to get voters to keep the HST, and will say anything to make that happen.”

Promises of rebate cheques and tax rate reductions have the appearance of tax policy written on the back of a napkin by a government in crisis.

“It’s disturbing to see that the BC Liberals are so cavalier about managing revenue streams.  Recently we have seen tax cuts announced and then rescinded, tax exemptions cancelled and then reinstated, and tax promises made and then broken.  The BC Liberals’ flip-flops have been remarkable and Christy Clark is continuing this pattern,” said Macdonald.

“This is a government that can’t manage and can’t be trusted.  The bottom line is that the BC Liberals have completely bungled the HST file, and now voters have a responsibility to send a strong message in the upcoming HST referendum.”

The referendum will be held on June 24 using mail-in ballots. The question is: Are you in favour of extinguishing the HST and reinstating the PST in conjunction with the GST?

Certainly tourism-based business in the Kootenays are not happy with the HST. A survey conducted by the Kootenay Rockies Tourism Association of 182 tourism-based businesses found that 72.5% say the HST has had a negative impact on them, specifically. As far as the HST’s impact on the overall tourism industry in BC, 81.3% say it has been damaged by the tax. And finally, 57.7% want to see a return to the old PST and GST system.