The B.C. government did not have any plans to harmonize the sales tax until after the 2009 election.
No negotiations were taking place between Ottawa and B.C. regarding adopting HST prior to the election.
The March 2009 briefing note that outlines the possibility Ontario would likely adopt an HST came to me the last week of March 2009. Over the past number of years the HST had come up in discussions with officials, as the federal government has been encouraging provinces to harmonize their sales tax since the 1990s.
I reviewed the note in March prior to Ontario's harmonization announcement, but based on long standing concerns about not being able to set or adjust the rate and the inability to protect consumers through rebates and exemptions, I stated at the time that B.C. was not contemplating adopting the HST, but that we would continue to follow developments in Ontario with interest.
Ministry officials continued to collect information about Ontario's decision to harmonize as they do in their normal course of their work.
It was not until a briefing after the election that I was made aware of the new flexibility available to provinces: $1.6 billion in federal transition payments, the ability to adjust the combined tax rate, and the ability to create customized rebates.
It was this new information, coupled with plummeting revenues and a deepening recession, that led to the province changing its position in July to move to the HST.
The first time anyone in federal government would have had any inkling that B.C. was thinking about harmonizing our sales tax was when I spoke with Finance Minister Jim Flaherty at a federal/provincial finance ministers meeting at the end of May 2009, and signaled we were considering changing our previous opposition to harmonization.
I encourage you, and all British Columbians to read the entire package of documents on our website at: www.gov.bc.ca/hst/https://spring.gov.bc.ca/exchweb/bin/redir.asp?URL=http://www.gov.bc.ca/hst
Colin Hansen
minister of finance
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