Sunday, March 31, 2013

Obituary: Harmonized Sales Tax of British Columbia

HARMONIZED SALES TAX OF BRITISH COLUMBIA (born: July 1, 2010-died: March 31, 2013): The Harmonized Sales Tax died peacefully across the Province of British Columbia at the end of March 31, 2013.

HST, as it was better known, was a long-term resident of a public policy hospice since the loss of a province-wide, mail-in referendum on Aug. 26, 2011 left it immobilized. The events of Aug. 26, 2011 also bruised the collective ego of the ruling B.C. Liberal Party, which will be long remembered for helping prolong HST's life to the detriment of its popularity.  

The victim of death-by-democracy was originally announced July 23, 2009 by Premier Gordon Campbell and Finance Minister Colin Hansen, who jointly claimed the tax reform measure would boost investment and job creation. It would be the “single-biggest” thing to improve B.C.’s economy, they said -- but they said it just 10 weeks after winning a provincial election in which their campaign pledged not to harmonize.
The HST Stickman, in happier days.

The value-added tax was a multi-stage merger of the 1948-established, 7% Provincial Sales Tax (also known as the social services tax) and 5% federal Goods and Services Tax. 
Born July 1, 2010, HST was never widely welcomed nor respected by the majority of citizens. 

HST increased the prices of airline tickets within Canada, funeral services, real estate fees, health club memberships, dry cleaning, haircuts, tickets for movies, concerts and sporting events, plumbing repairs, and professional services. 

Besides the 2010 Winter Olympics, the revenue HST brought in helped pay for the $514 million renovation of B.C. Place Stadium, the $17 million B.C. Jobs Plan advertising campaign, the $11 million-plus Times of India Film Awards, the Premier's Office's $475,000 credit card bill, her $201,000-plus charter flights to news conferences and programs such as the B.C. Liberals' Multicultural Outreach Strategy and the Pacific Carbon Trust's purchase of carbon offsets -- which the Auditor General called a waste of taxpayers' money. 

The film industry and manufacturers loved it, because they said it simplified paperwork and reduced the cost of doing business. The Liberal-allied Smart Tax Alliance was its biggest booster. But real estate agents, restaurateurs and publicans (among many) hated it. The HST (coupled with a more powerful Canadian dollar) stimulated a newfound passion for cross-border shopping. It plunged Gordon Campbell’s approval rating fell to 9% and he resigned Nov. 3, 2010

HST was the product of the stubborn realization by Campbell that British Columbia’s deficit was understated during the 2009 provincial election and the financial risks of hosting the 2010 Winter Olympics were far greater than anticipated. While insisting the idea was hatched after the election, documents released via Freedom of Information proved B.C. officials were talking with federal counterparts early in 2009. Hansen was even briefed about the HST in March 2009.

The Fight HST campaign led by ex-Social Credit Premier Bill Vander Zalm and organized by NDP strategist Bill Tieleman successfully pointed out that the HST was a shift of the tax burden from business to individuals. Their pivotal Sept. 19, 2009 rally on the site of the future Olympic cauldron at Jack Poole Plaza led to a petition that met the threshold of 10% of registered voters across the province. The 700,000-plus signature petition was delivered to Elections B.C. in June 2010 and it withstood an August 2010 B.C. Supreme Court legal challenge in  brought by six Liberal-allied business groups

After Christy Clark won the B.C. Liberal leadership in February 2011 and came to power as Campbell’s successor, she dangled a carrot at voters, hoping they'd agree to vote to keep the HST in exchange for her pledge to cut the tax by 2% in 2014. The province’s $5 million stickman ad campaign that was supposed to be informative, not persuasive. Advertising, by its very nature, is persuasive. For the HST, however, not enough people were persuaded to support the HST. 

The referendum received 1,610,125 votes, of which 881,198 (54.73%) were against the HST. It was hailed as a triumph for democracy by the Canadian Taxpayers' Federation, despite the confusing wording of the referendum question (yes meant no). The result forced Clark to cancel her planned early election call for fall 2011. At the time, Clark was more popular than her party and could have won an election. Now, polls say 62% of British Columbians want a new government.

On April 1, 2013, the HST was finally replaced by the resurrected PST -- which had been called “better-stupid” by ex-Finance Minister Kevin Falcon -- and the returned GST.

The HST is survived by Gordon Campbell, Colin Hansen, Christy Clark, Kevin Falcon and his successor Mike de Jong, along with Prime Minister Stephen Harper. Harper played a special role, by enticing B.C. to sign up for the HST with a $1.6 billion lump sum transition payment to help pay the cost of the Olympics. 

Campbell won three terms as B.C. Premier, but failed to finish his last one. He is now Canada’s High Commissioner to the United Kingdom and Northern Ireland, thanks to an appointment from Harper. Hansen is a retiring Vancouver-Quilchena MLA who remains on Treasury Board and the Planning and Priorities Committee. 

No memorial service will be held, but the HST will no doubt be remembered when British Columbians vote in the May 14 provincial election. 

Donations and sympathy cards, in lieu of flowers, can be sent to the Christy Clark fund, ℅ Today's B.C. Liberals. 



3 comments:

kootcoot said...

Bob, if you just backspace how ever much you have to after finishing a post, but before publishing, until the cursor is at the end of the last sentence - you will avoid all the black space between there and the formatted stuff at the end (like comments link and tags). Commenters can save screen space the same way.

That way more posts will be on you front page.

kootcoot said...

"black" above should have been "blank" and "you" should have been "your" in the last line.

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