FOULDS: Curiously, the Conservatives have escaped anti-HST wrath
Since the summer of 2009, when the B.C. Liberals surprised everyone by bringing in the harmonized sales tax and forcing the public to pay more for many goods and services, the one entity actually responsible for the price increases has largely escaped the wrath of the electorate.
That would be the federal Conservative government, then and now under Prime Minister Stephen Harper and then and now having Cathy McLeod as MP for Kamloops-Thompson-Cariboo.
McLeod voted in favour of the HST in the final vote in Parliament on Dec. 9, 2009.
The measure passed, Ottawa agreed to give Ontario $4.3 billion and B.C. $1.6 billion and, in B.C., 20 per cent of goods and services increased in price for no discernible reason.
That 20 per cent is the only reason anger in B.C. was and remains so potent.
The B.C. Liberals have recited the line over and over and over again as they try to sell a policy lemon: That 80 per cent of the things we purchase are unchanged from the previous system of PST and GST, which totaled 12 per cent.
Of course, that is simply an admission the HST has hiked the price of 20 per cent of the things we purchase, despite being assured by the Gordon Campbell Liberals that the HST was a revenue-neutral tax.
Why has the HST raised the price of so many goods and services?
Because the Conservative government in Ottawa set the rules, and the rules dictate that the B.C. Liberals could implement exemptions for only five per cent of goods and services.
Therefore, the tax was never intended to be and is not revenue-neutral, as then-Finance Minister Colin Hansen claimed it was in a discussion with me so in the summer of 2010 during a speech to the Kamloops Chamber of Commerce.
Nor has Hansen’s other prediction that day come true, that being lower prices across the board by the summer of 2011.
True, the provincewide anger at the B.C. Liberals is justified in the abysmal manner in which the HST was introduced and in the increase in the cost of many goods and services.
However, the federal government has avoided much of that anger, despite being the authority that has, in fact, decided to increase the cost of 20 per cent of goods and services in B.C.
The Conservatives have never been called on this and should be obligated to explain to British Columbians why the tax rate has been hiked if the goal of creating the HST was to help business in B.C. be more competitive by streamlining the tax system.
Days before Premier Christy Clark announced a plan to reduce the HST by two percentage points in the next two years, I spoke with Kamloops-North Thompson Liberal MLA Terry Lake, who made an interesting suggestion as to how the B.C. Liberals could, possibly, implement more exemptions despite being handcuffed by Ottawa's five per cent ceiling mandate.
"Let's look at the basket of exemptions and if we're happy with what's exempted now, great. That's within our five per cent. So, are there other ways of addressing the helmets, the bikes, this and that, the health memberships? Maybe you get at those through other programs, whether they be rebates or something else, without using the five per cent [exemption]."
However, Lake does not agree that an HST with the same exemptions as the PST/GST makes sense because it does not reflect changes in the economy.
"You don't get the benefits of a broad-based tax in terms of fairness, in terms of applying it. If I buy a coffee cup from a retail store, I have to pay PST on that coffee cup. Why don't I have to pay PST on the coffee that goes in it? What's the difference? Our service economy is much more important and shouldn't be treated differently than other parts of our economy."
Interesting point, but the same question can be posed to items taxed under the HST. Previously, books, magazines and newspapers were exempt from PST and incurred only the five per cent GST charge. Under the HST, books and magazines remain taxed at at five per cent, while newspapers are now taxed at the full 12 per cent.
And, there are countless examples of such HST oddities. Why?
Clark reversed her very recent stance and has decided to phase in a two per cent reduction in the HST by 2010. Still, all those items will remain more expensive three years hence.
Will voters accept Lake's argument and Clark's reduction in the summer referendum? I think they will, if only to put an end to this neverending saga.
But, remember Nova Scotia in this taxing mess. Eleven months ago today, that Maritime province increased its HST to 15 per cent.
Nothing, it seems, is forever.