A B.C. Liberal government-commissioned panel delivered a report Wednesday that says there would be an immediate benefit to families by overturning the harmonized sales tax, but the decision has longer term consequences.
A Prince George anti-HST campaigner immediately dismissed the report as biased.
Panel chair Jim Dinning, the former-Alberta finance minister, said the immediate benefit of returning to the old system would be, on average, another $350 in families' pockets.
But going back to the provincial sales tax and the goods and service tax system would mean turning away from the gradual future economic benefits expected with the HST, reported the panel.
Remaining with the HST would retain a simpler tax system used by more than 140 other countries and a more competitive economy, said the panel.
The panel -- acknowledging its hard to put concrete numbers to future benefits -- estimated that by 2020 under the HST system the economy would be $2.5 billion larger than under the PST.
That's an increase of just more than one per cent.
Moving back to the old tax system would also likely mean refunding the federal government's $1.6-billion in transition funding, and in the first year alone, put a $531-million tax hole in the provincial budget.
Dinning noted the public would be making a choice normally made by the government, adding that tax policy is never easy, in part, because the science of taxes and economic policy is more of an art form. "There's a balance that British Columbians face -- do we go for the short-term payoff, or do we enjoy the longer-term benefits that harmonized sales tax brings to British Columbia," Dinning told reporters.
Eric Allen, who was a Prince George organizer in the successful anti-HST petition campaign, said the panel report is misleading because while it says it hard to pinpoint benefits, it goes on to point those out, including an increase in economic activity and jobs.
The report also links the increased revenue to a need for spending on health care and education, which is meant to spook people, said Allen. "I don't see it as independent," said Allen, who recently joined the fledgling B.C. First Party.
The report will form part of the backdrop to a decision B.C. voters will make in a referendum scheduled for June on repealing the HST. The Liberals introduced the controversial HST last July which combined the provincial sales tax and the federal goods and services tax under one 12 per cent tax.
The introduction of the HST meant consumers pay the provincial seven per cent portion of the tax on some new items, including meals, domestic airline tickets, haircut and homes over $525,000.
The tax was met with widespread dislike and a petition initiative led by former-premier Bill Vander Zalm was successful, leading to the vote next June.
The introduction of the HST, in part, led to the resignation of premier Gordon Campbell half way through his third term. He was replaced by Christy Clark in a leadership race that concluded two months ago.
Other HST panel members included former-B.C. auditor general George Morfitt, Coastal Capital Savings president and CEO Tracy Redies and Simon Fraser University professor emeritus John Richards.
