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EDITORIAL: Challenges ahead
The anti-HST voters were celebrating last week, as the harmonized sales tax was defeated through referendum.
And now, we’ll all pay for this knee-jerk reaction in the coming years.
Yes, it was democracy in action. And it undoubtedly delivered a message to the B.C. Liberal government.
However, this outcome was not reasoned, well-informed judgment as much as it was politics and emotion. It’s not a good approach to determining long-term economic strategy.
For all the cheering about the public finally having a say in government decisions, the HST vote showed the downside of establishing tax policies via referendum.
The defeat of the HST was largely a backlash against the Liberals, and dislike of a new tax.
Much misinformation and misconception still existed among the electorate when it came time to vote.
With the rebates available to seniors, and the proposed reduction of the tax from 12 to 10 per cent over three years, the impact of the HST on average citizens was not, in the larger context, nearly as significant as some opponents maintained.
Yet the advantages it offered in terms of business competitiveness and job creation were major.
Those will be lost, as the province reverts back to the antiquated, complex provincial sales tax. The process of doing so will be hugely expensive, including repayment of $1.6 billion in transition funds provided by Ottawa.
Furthermore, the additional revenue generated by the HST will vanish. That will have to be replaced from other sources (taxes), or it will result in budget cuts.
In either case, many of the people who voted against the HST – but demand top-grade government services – will be unhappy again.