The BC Liberals and the HST mess

The BC Liberals must be completely delusional. They seem to think that a majority of British Columbians can be hoodwinked into supporting a tax that no one wanted, imposed by a party who promised not to, simply by bribing (some[1]) taxpayers with their own money and the promise of a 2 percentage point reduction by 2014. Just because Christy Clark is now the premier does not mean that the leopard has changed its spots. We still have Kevin Falcon as the talking head finance minister making these promises. If we have not learned by now that we cannot trust him and his merry-band of conservative Liberals then we deserve what we get.

The whole scenario gets worse. We will only get the purported changes to this tax if we vote to keep it. If a majority votes against the tax, then, the BC Liberals point out, we would have to pay back $1.6 billion dollars.[2] Now, it seems to me that if the BC government spent that money then it is going to be up to them to figure out how to pay it back to the feds if that is indeed what has to happen. Threatening us with this consequence is meaningless, as we had nothing to do with bringing in the tax, accepting the payment or spending the money.

We also keep hearing how the HST is going to create jobs. I am not an economics expert but I fail to see how a regressive tax can create jobs? Every pro-HST expert seems to say: “The HST is great for business because it simplifies the paperwork businesses have to fill out. Oh and it creates jobs.” I have yet to hear anyone explain to me how reducing the purchasing power of the average consumer through increased and excessive taxation creates jobs. Maybe it creates jobs in the civil service counting all that extra money.

I get that the HST simplifies accounting paperwork for business and that is good. However, the real issue with the transfer to the HST was that it applied to everything the GST applied. While the PST was only on certain things, it was not on restaurant meals and books in particular. The restaurant industry has really suffered with an increase of 7% on meals. A tax on books is just ludicrous. We need to encourage people to buy books and to read.

I think the only way to make the HST palatable is to remove it from the items that did not have PST on them. Make restaurant meals, books and other items and services that were not subject to the PST tax-free. I think then people would see some benefit to them. The way it is now, the tax is both odious and onerous.

If the BC Liberals seriously want people to support the tax they need to make the changes, I have suggested and codify them in legislation regardless of the outcome of the referendum. To tell us that we will only get this minor change to the bitter pill we have all had to swallow if we are behaved and we agree to let them keep it is insulting. I only hope that all the people who have been betrayed by the BC Liberals send them a very loud message with this referendum.


[1] If you have kids or you are a senior earning less than $40,000, you will get a one-time bribe payment of $175.

[2] Adrian Dix, leader of the BC NDP says it is more like $1.2 billion. But what’s a few billion among friends?

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Published in: on May 26, 2011 at 7:56 pm  Comments (1)  
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  1. It might well be that the HST will lose the referendum. Most people will vote not to be taxed, regardless of the need (in education and health care particularly), which is why there should never be direct votes on taxation. That’s how California got into huge financial trouble.

    Rescinding the HST would be very expensive. Falcon is trying to get people to realize that, but I don’t think it’s working.

    Let’s say the HST loses, we go back to GST and PST, somehow straighten out the financial mess that will leave and reinstate the two collection systems. Then let’s say the next government is NDP (which seems unlikely with Adrian Dix waging class warfare, but there could be a centre-right vote split). That NDP government will need revenue. Ultimately, there is only one source for such revenue.


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