While just over 54 per cent of B.C. voters chose to extinguish the HST last week, the Sunshine Coast - Powell River district sent a slightly stronger message to the province, with a 58 per cent vote to kill the government instituted tax.
"It says that people are engaged here, people are informed and that they participated in the process," said Powell River - Sunshine Coast MLA Nicholas Simons. "They are as hurt as anyone by Liberal government polices, and this is just one of the many that has hurt coastal communities. So getting rid of the HST and restoring a system where we can have control over our tax policies, I think, is a good one."
A total of 20,942 people in the Powell River - Sunshine Coast riding cast a ballot in the referendum. Of those ballots, 12,197 were to scrap the HST, while 8,745 voters wanted to keep the tax.
While some on the Coast are glad to see the HST's demise, others are disappointed with the referendum outcome.
"I think generally the business community is going to be pretty disappointed in this decision," said Jim Cleghorn, president of the Sechelt and District Chamber of Commerce. "It's going to have a profound effect on our economy, on business, on workers and unions, and it's going to just basically put this province back quite a bit over the next couple of years.
"I think some people who voted against this now are going to find out why they should have been for it, but unfortunately now it's too late."
The decision to get rid of the HST and go back to the old PST and GST model will take time to implement, with government setting a target date of March 2013 to return to the old taxation system.
Cleghorn expects to see more business investment and fewer home purchases on the Coast between now and the March 2013 target.
"I suspect what's going to happen is now business investment will accelerate because people will want to get in while they can deduct the HST," he said. "So businesses that are thinking of buying equipment and doing things like that, that have an HST component to it they'd be wise to do that before 2013.
"On the other hand, individuals who are buying homes will want to delay that decision until after 2013, because otherwise they have to pay HST on the purchase."
Clark Hamilton, chair of Coast Community Builders Association, said time will tell if scrapping the HST will be beneficial for the building sector.
"The HST, of course, impacts building tremendously to begin with," Hamilton said. "That, coupled with the economy, hasn't helped much. But it's going to take until March 31, 2013 to re-implement it [the PST and GST model] it's going to be confusing for a while because no one will know what to do with respect to rebates and things."
He sees the HST as a tax that could have worked but blames the timing of its introduction for its untimely end.
"It's really a difficult one. I think the idea was not a bad one, but the implementation and the timing were just abhorrent," he said.
Now that the decision has been made to scrap the HST, the government is embarking on an action plan to reinstate the seven per cent PST and five per cent GST tax system.
During the transition period, which government says will take a "minimum of 18 months," the province will provide quarterly updates on their progress.
"We will work as quickly as we responsibly can to return to the PST," said Finance Minister Kevin Falcon during a press conference in Vancouver on Aug. 25. "We have always been clear that, as the independent panel found, dismantling the B.C. HST and returning to the PST will take time to do properly."
Falcon said the decision by voters to scrap the HST was not surprising.
"I'm obviously, as the finance minister, disappointed by the result, but not altogether surprised," Falcon said.
"We recognized when we started from a place where 85 per cent of the public was opposed to the HST, in large measure due to our own mishandling of the introduction of that major policy change, that we had an uphill battle."
Although he would have rather kept the HST model, he said the provincial government will manage the public finances well through the transition.
"Although this presents a challenge, it is important to put that challenge into context," Falcon said. "British Columbia enjoys a Triple A credit rating. We've enjoyed a Triple A credit rating that we've restored from a position in the 1990s where we had multiple credit rating downgrades, and we will continue to provide good, strong fiscal management for the province.
"So this is a bump in the road. A significant bump in the road, indeed, but as I advised the financial markets and the credit rating agencies when I was back in New York and Toronto, it is a manageable bump in the road that we will continue to manage."
This month the provincial government will start discussions with the federal government around repayment of the $1.6 billion tax incentive given to adopt the HST through the comprehensive integrated tax co-ordination agreement.
- With files from Ian Jacques
