EDITORIAL: Time will tell the tale of HST
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Updated: August 25, 2009 3:34 PM
News that B.C. will move to a Harmonized Sales Tax has led to a feeding frenzy among everyone who either doesn’t like the B.C. Liberals or paying taxes. It’s a big list.
Critics of the party running things down at the legislature like to point out that the Liberals actually took a position against the HST in the lead up to the spring election. There’s no denying the government has done a flip flop on its position. What’s left for voters to determine is whether this is a case of politicians telling fibs for votes or whether circumstances really did shift so much that they were left with no other choice.
The NDP are sharpening their knives for the start of the fall session.
And then there are those who dislike paying more taxes, which is just about everyone else.
However, unlike tax grabs of the past, there hasn’t been a corresponding outcry from economists warning against the folly of taking money out of taxpayers’ pockets. In fact, most folks who study the mechanics of money are smitten with the idea of losing the PST.
Critics of the PST say it adds too much of a tax burden to production, discouraging investment and hiding the true cost of goods produced in B.C. The HST, on the other hand, targets consumption -- one reason it’s been given a tepid blessing by the Green Party of B.C.
Though critical of how the province introduced the HST, the Greens say it will reduce red tape and make it easier for small business organizations. The Greens also want the combined tax to drop to 10 per cent but it’s not clear if that’s a decision B.C. can make. Reports suggest that Ottawa wanted a 13-per-cent HST, as in Ontario, but was willing to lower that to 12 per cent for B.C. Both provinces will officially move to the new tax on July 1, 2010.
We think it’s simply too soon to say what the HST will mean in the long run. There’s no question there will be a period of adjustment that will be difficult for some businesses, notably new home builders. The bigger question is what will this do to the average person’s cost of living? The answer to that will go a long way to determining what role the HST plays in the next provincial election in 2013.
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