By LeRae Haynes
If British Columbians vote to keep the HST in the referendum beginning on June 24, the rate will be cut to 10% by 2014, Finance Minister Kevin Falcon announced recently. The cut would be in two stages, to 11% on July 1, 2012 and to 10% on July 1, 2014.
(Photo: Glen Thompson from Tell-Tale Signs says that British Columbians were âhoodwinkedâ with the HST from the beginning and that even with proposed reductions, he will vote a resounding 'yes' to extiguish the HSTÂ in the referendum.)Â
Falcon also said that all families with children under 18 and lower income seniors will get by the end of the year a one-time transition cheque, which will be $175 for each child and $175 for seniors. He described the payment as a bridge for families to get them through to the first cut in the HST, which will take effect a little over a year from now.
Local business owner and father of several young children, Glen Thompson said that he has disagreed with the HST from the very beginning, and said that after an hour-long discussion with Cariboo Chilcotin Liberal MLA Donna Barnett when it was first announced, felt that the decision had been made with no public consultation and was forced on British Columbians.
He said that, as much as the HST may represent simpler accounting for business, itâs still going to cost us money.
âTheyâre still going to get a ânoâ from me. Before the HST when I bought my supplies and equipment from Canadian Tire, for example, I was never charged PST. Now I have to pay tax on everything. As a business I can write off a few more things than before, but when I take my business and personal lives together Iâm still paying more. I pay more for stuff for my kids and for our household: I am not farther ahead,â he explained.
âBritish Columbians were hoodwinkedâyou canât trust politicians as a whole. If you can trust them, itâs because they really donât have the power to change much.â
If voters reject the HST, none of the changes will take effect and government will face costs estimated of $2.3 billion over three years. The government remains committed to balancing the budget under both scenarios by 2014/15, but if the HST is defeated, it projects a $2.6 billion deficit for the current fiscal year. In addition, $1.8 billion will be added to the long-term provincial debt.
Experts report that repealing the HST before the end of a five-year agreement between BC and Ottawa would be a lot more complicated than agreeing to it in the first place, raising a series of legal uncertainties and possibly leaving the province owing as much as $1.6 billion to Ottawa.
Professor Martha OâBrien, tax law teacher at the University of Victoria, has said that there is nothing in the agreement between BC and Ottawa that considers the termination of the HST before 2015, stating that it âseems to be binding for a five-year-term.â
The recently-released independent HST panel report states that âgoing back to the PST can be done: just not overnight. It will take 18-24 months to go back.â
Local Fight the HST representative Eric Freeston said that if the HST is voted against this July, and will take 18-24 months to âgo backâ, it will be close enough to the five-year mark so that paying back the money to Ottawa is a dead argument.
Falcon said the government remains committed to the HST because it is a better tax for the economy, but noted that if voters reject the tax in the referendum that starts June 24, it will honour that result and move to reinstate the GST and PST. Returning to the PST/GST would not necessarily mean bringing back all the old exemptions, however, Falcon said, adding that âthe only way we could do it is with a program cut in spending.â
âThe government seems like itâs trying to âsweeten the HST potâ on one hand with the reductions and payouts, and âwave the big HST stickâ on the other with the threat of payments weâll have to pay back to Ottawa resulting in further cuts to services,â Eric said. âThey seem to think that those who arenât enticed by the âcarrotâ will be threatened by the âstickâ and those who arenât threatened by the âstickâ will be enticed by the âcarrot.ââ
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