Disharmony Over a Sales Tax May 3, 2010
Posted by admin in : Bill Bennett , trackbackSince one focus in the HST debate is on the issue of when it was first considered and decided, I will set out in this column how and when we decided to adopt a harmonized sales tax. While I agree that government in normal circumstances would not announce a major policy within a month following an election, without talking about that policy during the election, the circumstances facing BC last May were anything but “normal.” Think back to a year ago as the world economy sank faster and further than any economist predicted. Both Alberta and Ontario were further off on their deficit predictions than we were. By the time cabinet was sworn in in June, government revenues had dropped like a stone. Should we have known how bad the economy would get? No one in the world predicted it accurately. So in June we realized the Province was at risk of a much larger deficit and I, like the rest of my colleagues, was looking for a way to avoid a much larger debt or raising income taxes.
At this time, the federal government encouraged us to harmonize our provincial sales tax with the federal GST. We learned we’d get $1.6 billion in transition, a real option to avoid adding more to our debt. Still, that financial assistance was not enough for me. I had to be sure that harmonizing the two sales taxes was good for BC in the long term. Would it be good for my two sons and their future? That’s an important test for me.
After hearing that consumer prices generally are lower in countries with a harmonized sales tax, that most credible economists in Canada touted HST as game changer for BC, how HST would create 113,000 new jobs, and how studies in Atlantic Canada proved that consumer prices go down after HST, I agreed to support it.
As for why we acted so quickly, we had until July, 2009 to decide or lose the opportunity to implement with Ontario on July 1st, 2010. It takes at least one year to switch from a provincially administered program to a federally administered sales tax program. I did attempt to communicate the details of HST through MLA columns, interviews, speeches, emails and meetings in my office, but clearly I failed. That, however, does not change how beneficial this will be for BC.
I never talked about HST in my election campaign. Frankly, I never even thought about it. As far as I am aware, it was mentioned once in the campaign by the premier, who said in response to a question, we had no plans to adopt a value added tax. And we did not. My cabinet colleagues and I have put our personal integrity on the line because we believe this is a policy that will help BC compete for jobs and investment in the new, hyper-competitive world we have inherited, following the worst global recession since the 1930s. There was no conspiracy, no lying, just some ordinary people elected to the provincial government trying to deal with a really big challenge. I urge you to get the facts at http://hst.blog.gov.bc.ca/.
[Authorized by Bill Bennett, registered sponsor (IPA-2010-002-035) under the Recall & Initiatives Act, 250-919-2255]
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