Fifty-four per cent of respondents in the recent referendum on the 12 per cent harmonized sales tax (HST) expressed the desire to do away with the arrangement.
The majority favours a return to the combined provincial sales tax (seven per cent) and federal goods and services tax (five per cent).
The provincial liberal government was unsuccessful in saving the HST in spite of a strong advertising campaign and a promise to reduce the tax to 10 per cent by 2014.
What lays ahead now is a process that many agree will be expensive and time consuming as the labourious process of changing systems is undertaken.
Anti-HST crusaders such as form Social Credit Premier Bill Vander Zalm and current provincial NDP leader Adrian Dix had each expressed delight at the outcome, while government spokespeople including Finance Minister Kevin Falcon were suitably contrite – likening the referendum result to a “lesson learned” as to the importance of including the public in such major decisions.
The harmonized tax, as you may recall, was brought in shortly after a liberal election win, and had not been hinted at during that election.
Many feel Premier Gordon Campbell’s victory itself may not have come about if the HST had been on the table during the campaign.
Here in Castlegar, comment was solicited from three members of the business community, including:
Owner Dale Donaldson of Mallard’s Source for Sports.
“I’m disappointed,” said Donaldson, “although I spoke to (MLA) Katrine Conroy and sort of suggested that maybe there’s a way... if they re-instituted the exemptions they had before into the new legislation... that it may appease everybody.”
Food is the main commodity Donaldson thought of in terms of what ought to be exempt from heavy taxation.
“It could be food, it could be real estate fees, it could be haircuts,” he said of previously exempt items.
“I think, quite frankly, the HST is better legislation than the old regime,” said Donaldson.
“If there’s a way to salvage it, I think it’ll stop a lot of the pain we’re going to be going through over the next couple of years.”
The first reaction from Florio Vassilakakis of Castlegar’s Element Club, when asked about the referendum result, was disappointment as well.
“I’m one of the believers that the HST is a benefit to the economy in B.C.,” he said on August 29.
Vassilakakis outlined how the harmonized tax had helped him weather some strong inflationary pressures over the past couple of years, particularly in regard to food prices.
“I look at it, and I’ve been able to keep my prices, kind of in check,” he said, linking some of that ability with savings available through the HST.
The entrepreneur said it’s been difficult to debate the HST issue with people because of the large amount of misinformation which has circulated on the topic.
That misinformation, and contempt for the way the harmonized tax was brought in, in Vassilakakis’ opinion, were central factors in the vote to extinguish the HST.
“It’s unfortunate it came down to that,” he concluded. “But at the end of the day, the provincial government still has the opportunity to re-instate the GST and PST in a different way than they did before. That may, in fact, have the same net effect that the HST does.”
Bob Sarri is the manager of the Canadian Tire store in Castlegar. He was tuned in to the radio right around the time the results were to come down.
Sarri did not choose to mention anything of an economic nature in describing his post referendum feelings, only strong support and for the points made by MLA Katrine Conroy on the occasion.
“Most excellent” is how Sarri categorized Conroy’s comments.
The MLA was very pleased with the result and had praise for the way the democratic process was demonstrated.
On August 30 she reiterated the sentiments expressed following the announced result.
“I had said that I wasn’t surprised by the result, because those were the sentiments I had picked up on as I spoke to constituents during the whole referendum process,” said Conroy.
“People were not so much angry with the tax, but with the way it had been brought in. They felt they’d been lied to.”
“I’ve always advocated that it’s the peoples’ voices that must be heard,” said Sarri.