Vaughn Palmer
In Victoria
As the first candidate into the race for the B.C. Liberal leadership, Moira Stilwell was also the first to wrestle with the millstone-around-the-party-neck that is the harmonized sales tax.
"The way we brought in the HST has created a lot of anger and distrust," she said. "Unfortunately, the HST referendum has become a flash-point for the anger and distrust, so I feel the sooner we can lay that to rest, the sooner we can talk about the future of B.C."
Next in was George Abbott, who refined the call for an earlier vote - right now it's set for Sept. 24 - down to a date of "no later than June 24." Details to be fixed in consultations with Elections BC, the Opposition and the Fight HST group.
The third entrant, Kevin Falcon, tipped his hat to Abbott on the proposed date change, then one-upped him with a proposal to rehabilitate the tax with an angry ("pissed off," as he put it) public.
"I want to have a discussion with people about whether their opposition might be tempered if the rate was marched down to 10 per cent." One point starting next July 1, a second point "when provincial revenues are sufficient to accommodate."
Yes, by agreement with Ottawa, the current rate is locked in until July 1, 2012. But Falcon guessed the federal government might be flexible on that point, if there were a chance to stick with the single national-sales-tax regime.
Abbott fired back on Falcon's proposal to cut the tax. He noted that even a one-point reduction would cost about $800 million a year - "Can we afford it?" - and he expressed doubt that what he described as a "trick shot" could convert the public to supporting the HST at this late date.
Even more pessimistic was the fourth entrant into the leadership, Mike de Jong.
"We went to the town fair with a product that we told people was a thoroughbred horse and they decided it was a pig," he told reporters. "And I don't know that you're going to make much difference putting lipstick on the pig at this point. I think people have decided their view on the HST and we have to respect that."
He'd also shut down the information campaign on the tax and pretty much give up trying to persuade people to support it. "Because of the mistakes we made in terms of the introduction, and the reaction that it has engendered on the part of people, the more the government tries to sell this, the stronger the negative reaction is."
Instead, he urged the government to begin working on Plan B: "I think we should take advantage of the next two or three months to discuss alternatives because, quite frankly, everything I've heard thus far suggests the people are going to vote to eliminate the HST."
I put all of those options to Finance Minister Colin Hansen - "Mr. HST" himself, and you can bet he loves being called that - during an interview this week on Voice of B.C. on Shaw TV.
On the proposed earlier date, Hansen noted that the vote is set for Sept. 24 of next year under the provincial initiative legislation. The government could move up the date by switching to a vote under the more open-ended provincial referendum legislation.
But there'd still be the legal requirement under the initiative act to hold the vote in September. "The only way that we could change that date is to go into the legislature and amend that legislation. That certainly would be an option that a new leader would have."
Cutting the tax by one point to save it? "Well, it's all about: How do you raise the taxes necessary to pay for services? It would be a challenge to find enough room in the fiscal plan to do a full $800 million - but again, what trade-offs are there?"
Hansen doesn't share de Jong's pessimism. " I don't think anyone should jump to conclusions about the outcome of the referendum," he said, citing a poll that showed opposition to the tax was at least slightly diminishing. "I am not a pessimist, because first of all, I think it is good tax policy."
Lastly Hansen warned against presuming that the province could easily abandon the HST and reestablish the old provincial-sales-tax regime.
"That would be extremely complicated," he said. "It would mean putting back in place a whole division of government that was there to collect the PST and administer the PST system. Three-hundred-and-some-odd public servants at a cost of about $30 million a year."
Business, having switched over to a single tax regime, would have to switch back to separate federal and provincial sales tax, with all that would entail in additional paperwork and administrative costs.
Plus, there would be the task of negotiating with Ottawa. "We would have to pay Ottawa back $1.6 billion that has been and is being transferred to the province -- the transition fund. It would not be an easy process. It would take at least months. It would be a very complex process to put everything back in place."
In short, much as the leadership hopefuls would like to put the issue to rest once and for all, the HST will likely dog them and their government for many months to come.
vpalmer@vancouversun.com
