All right, British Columbia, let me get this straight: you voted against a tax cut? And you were led by an old guy with a funny voice, who used to be the premier of the province but left the office in scandal over 20 years ago?
I have to admit, B.C., I’m torn. As a firm supporter of the Harmonized Sales Tax (HST), I was frustrated to see it voted down in the recent referendum, especially as it was supposed to drop from 12 per cent to 10 per cent in a few years. But all this craziness over the past two years is the reason why I love this place – never a dull moment on the Left Coast.
Ah well, life goes on, and we’ve all got bigger problems than worrying about whether or not a tax will be or won’t be here. Ten or twenty years down the road, however, we’ll be feeling a financial crunch as more and more people depend on the government for their health care and pensions. So, on behalf of everyone under the age of 40 who’s going to have to find a way to pay for all that, let me just say: “thanks.” (I’m hoping sarcasm transmits properly over the Internet.)
It would be easy to blame Bill Vander Zalm or the NDP for exchanging short-term political gain for long-term citizen pain, but in the end, it’s not their fault. No, the blame for this devastating loss should be put squarely on the shoulders of the B.C. Liberals.
Remember the provincial election campaign of 2009? Really? I don’t. Well, actually, I guess there was one phrase that now defines that campaign: the HST was “not on the radar” of the B.C. Liberals, who went on to be elected the governing party. Then, before you could say “value-added tax,” the government said the HST would be in effect by next July, and the legislation was rammed through in the spring. Small businesses apparently entered financial Armageddon as that extra two per cent destroyed their bottom lines. All the while, one government minister or another praised the HST, saying it helped B.C. remain competitive – but never actually saying how it helped us remain competitive.
Last fall, the government was extremely humbled after an access-to-information request showed provincial bureaucrats were corresponding with their federal counterparts about implementing the HST. Before the 2009 election. Then Gordo called for a referendum, then quit, then Carol James was forced out, then Christy Clark rode back into the B.C. Liberal fold and called for an early mail-in referendum, and then, Friday, the results.
And all the while, the B.C. Liberals didn’t ever seem to want the tax, even though they argued for it in the beginning, and economist after economist kept arguing that the tax was a good thing for the province. An independent report released in May stayed neutral, but clearly showed all the benefits of moving to the HST. Whether or not the report was truly neutral is irrelevant. The Liberals should have used the findings from it and kept pounding its main messages to the electorate: creation of tens of thousands of jobs, financial stability in the future, easier method for businesses to remit their taxes. At the very least, someone could have said, “we really screwed up with the whole ‘radar’ reference, but we don’t know how to use metaphors. We’re politicians, after all, not English majors.”
But they didn’t do any of those things. They did, however, announce a two per cent cut to the HST – by 2013, the tax would be 10 per cent, not 12 per cent. They promised it, they enshrined it in legislation. A tax cut. How often does that happen? I kept waiting for the government to come swiftly out of the gates, sending its ministers to the far corners of the province, knocking on everyone’s doors, saying “tax cut! Tax cut! TAX CUT!” And I waited, and I waited, and I waited…
The excuse, apparently, is that they didn’t want to be married to the tax in case it was defeated in the referendum. The NDP could have used the Liberals’ unfettered support to hammer them in the next election campaign. What the Liberals apparently didn’t realize is that they’ve been married to the tax since the 2009 election.
Now, we’re out $1.6 billion, because the province will have to re-pay the transitional funding back to the federal government. The calls for the feds to let us keep the cash are ridiculous. Quite plainly, a deal was struck: the feds gave the province the money, and province promised to implement the HST. No HST, no money. If you ask me to do something and pay me for it, and I don’t do it – should I really be entitled to keep your money?
This government and future governments will now have to look at a way to deal with the financial strain that will be created without the HST. Should we raise income taxes? Should we go into deficit? Should we tinker with a sales tax?…wait, we’ve already done that.
~Written by Chris Armstrong