Anti-HST sentiment undermines economy: industry CEO

British Columbians need to put the harmonized sales tax (HST) controversy behind them now that the tax is in place in Ontario, said Canadian Manufacturers and Exporters chief executive officer Jayson Myers.

Following a speech Tuesday to the Prince George Chamber of Commerce, Myers said the ongoing uproar is undermining business invesment in B.C.

"The problem right now is the political uncertainty itself has become the problem," he said. "This is the time [with the economy coming out of the recession] when businesses want to invest and nobody's going to invest unless it's pretty clear the HST is going to come to a decision."

A referendum on the tax in British Columbia is set for September.

The move to harmonize the federal goods and services tax with B.C.'s provincial sales tax represents a $1.9-billion savings for business, said Myers, which can be used for job-creating expansions and upgrades.

"Part of this is just making sure companies have money to spend and B.C. is on a level playing field with Ontario," he said.

Critics say consumers are bearing the load in the form of additional tax on such items as restaurant meals and haircuts.

In 2010, low income families were given a rebate of up to $230 per family member, the basic exemption from income tax was increased to $11,000 from $9,373 and the spousal credit was increase by $1,627 to offset the impact.

As a result, the impact ranges from a savings of $535 for a family of four on $30,000 a year to a cost of $314 a year for a single person making $80,000. The effect on a family of four living on $90,000 adds up to $107 in additional expense according to a provincial government analysis.

On the bright side for business, Myers noted the corporate tax rate is due to decline to 25 per cent in 2012 from 2010 currently. He predicted that will translate into a 10.4-per-cent increase in business profitability, a 0.52-percentage-point decline in the unemployment rate and an 2.4-per-cent increase in personal income for Canadians.

During his speech to the chamber, Myers presented a chart showing an inverse-correlation between business profitability as a percentage of the country's gross domestic product and the national unemployment rate.