Populist HST fix coming soon

VICTORIA – Premier Christy Clark’s shifting position on the harmonized sales tax finally appears to have come to rest.

Her government is preparing to “fix the HST,” and the terms of that fix will be made available before people mark their ballots in a mail-in vote in June, Clark told reporters at the legislature last week.

There has been a flurry of activity on the HST in recent days, and a few things are becoming clear. Clark and Finance Minister Kevin Falcon are preparing to do what I’ve been saying for months the government must do – make a solemn vow to cut the HST rate to 11 per cent as soon as they can.

And in keeping with Clark’s fondness for populist, headline-hunting gestures, the government will also likely rebate the HST on bicycles and bicycle helmets, and possibly fitness club memberships as well.

A couple of other “family-first” exemptions may also be gleaned from the town halls, online surveys and polling that are currently going on.

A well-known polling firm was in the field last week, asking not only about people’s impressions of their new premier and opposition leader, but also their view towards a reduction in the HST rate. Win or lose the mail-in referendum on the tax in June or July, the B.C. Liberals are getting ready for a fall general election.

Falcon estimates that cutting one point from the HST would cost the provincial treasury $850 million. Given that revenue from the HST is running well ahead of the finance ministry’s estimates, that figure could be low.

The government’s independent panel issued its report last week, and it confirms that the HST is bringing in more revenue than expected. Going back to the PST would not only trigger huge costs of paying back federal transition funds and reconstructing a provincial sales tax office, it would cost the B.C. government more than $500 million in net revenue in the first year, and more after that.

Here’s one reason why HST revenue is higher than originally projected. Contrary to the apocalyptic predictions of some in the restaurant industry, the panel compiled Statistics Canada figures and found that B.C. restaurant sales rose by three per cent in the first seven months of the HST. That’s exactly the same increase as the rest of the country, despite the supposedly crushing effect of the tax and B.C.’s new impaired driving regulations.

Jobs, Tourism and Innovation Minister Pat Bell has pitched in as a host for the telephone town hall program that continued this week. These giant conference calls were to be staged Tuesday evening in the Okanagan, Fraser Valley and northern and central Vancouver Island. The program wraps up Thursday evening with calls to Richmond, South Delta, the North Shore, Victoria and Vancouver.

Bell said his call for the Interior and North Coast had more than 30,000 people on the line. Some were still upset about the HST, while others had misconceptions about what costs it does and doesn’t increase, he said. And lifting the tax from bicycles was a popular choice.

I continue to get e-mails from people who are misinformed about the HST. One reader said he is paying it on heating oil. I suggested he check his bill again, and there it was, a rebate for the seven-per-cent provincial portion. The GST applied before and it continues to apply now.

These telephone town halls have gone a long way towards putting the discussion on a factual basis. Voters may yet be persuaded to keep the HST.

 

<I>Tom Fletcher is legislative reporter and columnist for Black Press and BCLocalnews.com

tfletcher@blackpress.ca</I>

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