The harmonized sales tax (HST) debate is heating up and stirring conversation among many British Columbians.
That conversation continued Monday night as former premier Bill Vander Zalm, who is leading the Fight the HST campaign, spoke to a small crowd at the Sechelt Indian Band Hall.
Vander Zalm is touring the province to try to rally citizens to vote yes to extinguish the HST in the upcoming referendum.
Vander Zalm argued the HST is inflationary, economically counter-intuitive and kills jobs while driving the economy underground. He said the HST is regressive, it causes a loss of provincial sovereignty, and it threatens democracy. He then warned of the tax's ability to grow even more.
"It will be just like Europe, where they started at six or seven per cent, and now it's up to 21 to 25 per cent," Vander Zalm said.
Vander Zalm also repudiated statements from the independent panel's report, calling them ridiculous.
Extinguishing the HST, Vander Zalm said, would send a strong message to government.
"Once we win it, the message to government is that democracy has played a role in this province such as we've never seen it before," he said.
Last year Vander Zalm and his supporters collected more than 700,000 signatures in an anti-HST petition drive.
With only a few weeks left until the referendum, both sides of the yes and no camps are working to inform the public.
The province-wide referendum June 24 will ask the question: "Are you in favour of extinguishing the HST (harmonized sales tax) and reinstating the PST (provincial sales tax) in conjunction with the GST (goods and services tax)?"
A referendum voters' guide was mailed out to residents this week, with information from both the yes and no sides to assist voters in making a decision. The anti-HST group has its website at www.fighthst.com, while the provincial government has its own website at www.hstinbc.ca.
After an announcement in July 2009, the provincial government brought in the 12 per cent HST on July 1, 2010 blending the seven per cent PST with the five per cent federal GST.
Many citizens felt there was little or no consultation with the public on procedure, making it a highly contentious issue. Momentum from both the yes and no side has lead to the referendum.
In April, the provincial government, under Premier Christy Clark, began a public engagement process with British Columbians on ways to improve the HST.
In the legislature on May 31, government passed a motion committing to its promise to reduce the HST to 10 per cent from 12 per cent. Should British Columbians vote to keep the HST, the provincial portion of the HST would be cut by one percentage point to six per cent from seven per cent in July 2012, and cut one more percentage point to five per cent on July 1, 2014.
The Liberal government has said in recent weeks that the rate reduction will benefit all B.C. families. But according to an independent, government-appointed panel report released in May, harmonization costs B.C. families an average of $350 more per year on their typical expenditures. However, by reducing the HST rate to 10 per cent, the $350 average cost becomes a $120 average benefit for B.C. families.
"As a government, we are convinced that the HST is the right tax policy for the province," said Minster of Finance Kevin Falcon.
Supporters of the HST argue the system protects and creates jobs, helps small businesses grow and protects seniors and low-income families. Scrapping the HST, supporters feel, would have negative effects, including making exports more expensive, putting resource jobs at risk and causing a burden to low-income families. It would also likely require the province to repay the $1.6 billion the federal government provided as an incentive to bring in the new tax, resulting in higher debt and taxes or cuts to services.
