British Columbia’s Harmonized Sales Tax is worth fighting for, even if the Liberal Government fumbled the ball introducing it, Finance Minister Kevin Falcon told Merrittonians at the Grand last Wednesday.
Falcon acknowledged the government’s mistakes and defended the HST at the Merritt and District Chamber of Commerce sponsored event, just days before the tax’s anniversary on July 1.
“I can’t really think of a worse way to introduce a major tax change,” admitted Falcon. “We fumbled the ball on that one, but the issue is how are you going to respond and how will you get better?”
Falcon’s visit came just as British Columbians are being asked to choose between keeping the HST or returning to the system of two separate taxes – the PST and the GST – and he maintained the government’s position that the HST is better for jobs and the economy.
Falcon told those in attendance that the HST would benefit small business and agriculture and said that over 140 countries use a value-added tax like the HST including some of the fastest growing economies in the world and suggested it would be regressive to return to the two-tax system.
“It’s important to think where we want B.C. to be,” said Falcon though he failed to mention specifically how the HST would boost the economy or create new jobs.
Falcon also spoke of how the government has introduced rebates and credits to help offset the impact of the HST. For example, he said many low-income British Columbians are eligible to receive B.C. HST credits up to $230 annually as well as $105 annually per adult through the Low Income Climate Action Tax Credit.
“There are 1.1 million families that receive quarterly HST credit payments,” he said, adding that should voters decide to keep the tax, these payments will continue even after the provincial portion of the HST is lowered from seven per cent to five per cent. In addition, the province will provide one-time payments to families with children and lower income seniors.
Since recognizing the importance of involving the public, Falcon said the government’s intent has been to listen and to get information out to the public that is factual and independent.
He explained how the government engaged in what he called the longest listening campaign ever in the history of the province and participated in telephone town halls with more than 275,00 people from around B.C. Based on the feedback they received, the government decided to lower the tax rate over the next three years.
“We took all of the info and said ‘the simplest thing we can do is drop the rate to 10 per cent,'” he explained. “However, we wanted to stage the reductions in a way that would be responsible and wouldn’t blow a hole in our budget.”
Over the next three years as the government lowers the HST from 12 per cent to ten per cent rebates and credits should help offset the difference, he said.
On the other hand, HST opponents say that killing the HST will save each person 7 per cent on hundreds of items, which will equal more in the long run for low-income earners. Also, according to an independent study the HST means the average family pays about $350 more per year than under the PST/GST system. Even so, Falcon maintained his position.
“I generally hate all taxes, just so you know, but this is generally better than going back to the complexities of a two-tax system,” said Falcon.
Referendum ballots should be arriving any day now, though the government has announced a deadline extension from July 22 to Aug. 5 by 4:30 p.m. to return the mail-in ballots.
