I suspect most people are not "political junkies". Indeed, I am not sure if I would even qualify. Most of us have more important things to do with our lives.
This was brought home to me last week by my sister who hadn't bothered to vote in the HST referendum. She wasn't sure what it was all about and felt she didn't have enough information to make an informed decision. Hard to imagine with all of the fanfare around the subject but fair enough.
However, collectively, we must not lose sight of the facts and the timelines involved in the whole HST debacle. As we move forward with our lives, there is a bit of a tendency for details to become murky. It is important to remember our history.
So when did this HST thing start? One could argue that it goes back to the introduction of the GST by the Conservatives during Mulroney's tenure as Prime Minister. And yes, I still don't forgive him that move.
That is not a real useful place to start, though. A more appropriate starting point for our dalliance with altered taxation policies would be January 2009. Specifically, January 23rd when Ontario Premier Dalton McGuinty publicly confirmed that Ontario would be implementing a harmonized sales tax.
This move has yet to be tested by the voters but Ontario is presently contesting a provincial election and it will be interesting to see if Premier McGuinty survives. An HST makes sense in Ontario which has a manufacturing and export based economy. However, Premier McGuinty had to sell his tax to Ontario's taxpayers by issuing $1000 cheques.
In any case, B.C. was put in a position where we thought we needed to respond. As we later learned, Minister of Finance Colin Hansen was given briefing notes on Jan. 16, 2009, prepared by his senior bureaucrats on the subject. With the federal government encouraging harmonization, it made sense to explore the implications.
And the implications were anything but rosy, according to the briefing notes. They expressed a concern about shifting the tax base from business to individuals and continued by suggesting: "a lack of support from some business sectors, the need to protect low income individuals and families from tax increases, and the need to ensure adequate provincial revenues".
Furthermore, on March 12, Minister Hansen's staff laid out the pros and cons for an HST, quoting a CD Howe Institute study concluding: "while long-term economic gain from harmonization is relatively clear, harmonization will cause short-term loss in GDP and unemployment. It may take five or more years before the impact on GDP is positive and even longer for real wages and job numbers to recover."
Pretty clear - an HST would be bad for B.C.
Premier Campbell reiterated this stance during the election campaign in May, 2009. The BC Liberals were not going to bring in an HST. But he also said, categorically, that the provincial deficit would be "$495 million maximum".
On May 12, 2009, the BC Liberals received their third straight mandate.
On May 15, 2009, Ministry of Finance Officials contacted the federal government to inquire about harmonizing our sales tax.
On May 24, 2009, Minister Hansen had a "water cooler chat" with federal Finance Minister Jim Flaherty about an HST for B.C.
What changed? The promised "$495 million" deficit had ballooned into something north of $2 billion dollars. The pre-election budget was full of "fudge" to say the least.
So, on July 23, 2009, Premier Campbell and Minister Hansen shocked both businesses and consumers alike by announcing the creation of the HST. Yes, in a mere 72 days, the government was able to negotiate an arrangement with the federal government for the implementation of the tax.
Note that negotiating our way out of the HST, according to the present Minister of Finance, is going to take something like 10 months! One would be very justified in asking why it is going to take so long?
In any case, on March 30, 2010, the "Consumption Tax Rebate and Transition Act" was introduced - a mere 8 months after introducing the tax. Again, why is it going to take 18 months to bring back the PST? Especially as the legislation is already written and we know that it works!
On April 29, 2010, the BC Liberals shut down debate and brought the HST into being. And on July 1, 2010, we started paying. An extra billion or so in taxes in the first nine months alone. This from a tax that was supposed to be "revenue neutral"!
But the most important day to remember in all of this is August 26, 2011, when we finally heard that some 54.73% of the people of this province rejected the HST.
"Those that cannot learn from history are doomed to repeat it."
Hopefully, politicians and taxpayers alike have learned a lesson this time.
