HST result a setback for the economy and a message to the government – van Dongen

The vote to repeal the HST is admittedly a setback for both the provincial economy, and for the Liberal government politically, Abbotsford South MLA John van Dongen said in the wake of Friday morning's HST referendum announcement.

"It's a setback, and there's going to be cost here, and hurt here, to businesses and individuals – probably more than people realize," said van Dongen.

The province must repay $1.6 billion that the federal government paid the province to implement the Harmonized Sales Tax. It must also recalibrate its budget target to balance the books by 2013-2014, given that provincial tax revenues will be lower under the PST

He said the change back to the PST system will cost B.C. agriculture $20 million, and given that Abbotsford farms account for about 20 per cent of the provincial industry overall, the city will not enjoy about $4 million in benefits under the HST system.

On the other hand, he said the change should help the restaurant industry in the short term.

The vote is also a political blow to the Liberal party, van Dongen conceded.

"I don't think it's good for our government, obviously," he said. "Part of the message is a vote of non-confidence in how we have run things in the past two years."

"We have to hunker down, and show British Columbians we are willing to listen, and we can and will run government effectively," he added.

Abbotsford voted to keep the HST. Abbotsford South was 56.72 per cent in favour of keeping the tax, Abbotsford-Mission 54.63 per cent, and Abbotsford West 51.46.

Van Dongen's Abbotsford South riding was the sixth-highest supporter of the HST in the referendum, and that is one positive he can take from the result.

"The people in my riding showed confidence in the recommendation to keep the HST."

He said the government must now demonstrate that it can deliver on promises to build a strong and stable economy.

"I, as an MLA, respect the will of the people," said van Dongen. "Hopefully we as a government as as MLAs take this to heart, and go back to work."

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