Re: Todd Whitcombe opinion piece "Parsing the PST"
In his response to my article on the negatives of the PST, Mr. Whitcombe raises some fair points for debate. However, he conveniently ignores the overwhelming academic (and practical) research that details why 'value added' taxes, such as the HST, are better for the economy than so called 'retail sales' taxes like the PST. This basic fact explains why, on a global basis, nearly every country outside of the USA utilizes taxes more like the HST than the PST.
For readers interested in the facts around the impacts of the HST on individuals and families in B.C., the 2011 report of the Independent Panel that reviewed the HST did in fact find a tax shift from businesses to consumers as Mr. Whitcombe notes, but the HST rebate provided to lower income British Columbians insured that the tax was at least progressive. Moreover, had the HST been continued after the referendum, the lower HST rate would have resulted in all broadly defined consumers being better off than under the PST.
On the business impacts of the PST, while I would generally agree that our province has attractive elements for business, there is no real debate that the PST has, across most businesses, negatively impacted costs. Taken together with other rising costs of doing business - like electricity rates - the erosion of B.C.'s overall competitiveness is something that trade and export driven economies like ours should pay close attention to.
One of the challenges with writing and commenting about the economy and the impacts of policy changes, is that there is rarely enough space to cover all of the data points and counter-arguments that constitute public policy dialogue in the 21st century. However, on the PST the fact base and analysis is remarkably consistent.
Jock Finlayson
Executive Vice President and Chief Policy Officer
Business Council of British Columbia
