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Wrong tax, wrong reasons

The government created HST in B.C. ( with the claim that the website provides an impartial analysis of the HST.

The government created HST in B.C. ( with the claim that the website provides an impartial analysis of the HST. The commercials with the little stick men and the website are supposed to illustrate the pros and cons of going forward with the HST in a non-partisan fashion.

Let's have a look and let's begin with "HST Basics". It provides dropdown blurbs on six questions:

What are the benefits of harmonization?

What does harmonization mean?

Which HST rebates and credits can I get?

What does the HST apply to and what is the rate?

How is the HST administered?

Is there additional information that business should be aware of?

Anyone think that this is a fair and balanced approach to discussing the HST? Not even close. Yes, these are questions to which people might like an answer but where are the questions like "What are the detriments of harmonization?" or, "is there additional information of which the taxpaying public of B.C. should be made aware?"

This website is a self-congratulatory mockery that seems to think that business is the only criteria for progress in this province. Consider the answer to the first question on the list:

"The introduction of the harmonized sales tax is an essential step to make B.C. businesses more competitive, encourage new investment, improve productivity, and reduce administrative costs for B.C. taxpayers and businesses.

"Most importantly, harmonization will generate economic growth and, over time, create jobs and generate more revenue to sustain and improve crucial public services."

There is no mention of the working public. Sure, there is "reduce administrative costs for B.C. taxpayers," but this doesn't mean you and me. That's businesses paying taxes. I have never encountered any "administrative cost" associated with paying the PST.

The question left unanswered is "how will this affect you and me?" And, of course, it is the question that the BC Liberals don't want asked because it would quickly lead anyone paying attention to the realization that this is a direct subsidy to business in this province out of the pockets of the taxpaying public. With no guarantees of a return on our investment.

Take the answer on the website to the question, "how does the HST help to create jobs?"

"It costs less money to produce goods and services under the HST because the business inputs are tax exempt. Major industries such as forestry, mining, oil and gas, and transportation provide thousands of jobs for rural and remote communities. B.C.'s resource and manufacturing sectors will benefit significantly from the HST as their business inputs and exports are no longer taxed.

"These businesses are encouraged to invest in capacity expansion and productivity improvements which, in turn, will create jobs and boost income for workers."

Ah, major industries are being "encouraged to invest in capacity expansion and productivity improvements."

But is that really the problem that we are having in B.C.? Not enough capacity? Are there mills out there that just can't keep up with demand; forests that aren't being cut because of a shortage of labour; planers that aren't running because we don't have enough people?

Everything I have been told about the forest industry in this province says that we have more than enough capacity. We don't have markets for our products and the absence of a market has nothing to do with the HST and a lot to do with a collapse of the American banking system which took down their housing market. The HST isn't going to address that fundamental issue.

As to "productivity improvements," that is a job killer. Productivity is "how many widgets can one person make per shift." Increasing productivity means that you have more widgets per person, meaning that you require less people to make them. Or you can make more widgets with the same number of people but only if you have a market.

In any case, nothing is binding. Industry is simply encouraged to re-invest their HST savings in the company and not to take the money as unearned profits. Let's see - a dividend for shareholders, a raise for the executive of a company, investing in infrastructure, or passing cost savings on to the consumers - which one do you think the major industries will go for?

More to the point, we aren't their "customers" so even if they do pass along the cost savings in the form of lower prices, it is not going to show up in the prices you pay on a daily basis.

A final point: there is lots of talk about having to pay back $1.6 billion to the federal government. But ask yourself, where did the federal government get the money from? That's right, you. That money is from the same source and costs us the same amount regardless of where the debt sits.

The HST is the wrong tax, at the wrong time, for the wrong reasons.