If the BC Liberal government’s plan to overhaul the HST is not met with complete skepticism by a wary public, the HST may well survive the coming mail referendum to become the province’s sales tax.
The plan announced Wednesday, to reduce the HST rate to 10 per cent by July 1, 2014, offer one-time compensation to families with children under 18 and seniors with incomes under $40,000, and boost business tax rates, is ambitious and even audacious.
Most importantly, it is a much fairer approach to this issue than anything else the government has rolled out in two years of virtual non-stop HST public relations disasters.
Premier Christy Clark deserves some of the credit, as does Finance Minister Kevin Falcon. Falcon broached the idea of reducing the HST rate in his leadership campaign. Other members of the BC Liberal caucus have been talking about it for more than a year.
Clark ran and won the party leadership on a pledge to look at government actions through a “family first” lens. In other words, “How does this action affect families?” It is an approach that was long ago forgotten by her predecessor, Gordon Campbell, who in his final years as premier seemed to only listen to the business community.
An independent panel concluded that the HST was a fundamental tax shift away from business and onto consumers, at a cost of $350 for the “average” family.
The tax is also bringing in far more revenue than Campbell ever acknowledged. Anyone could determine that it was far from “revenue neutral,” as an additional 20 per cent of items, formerly exempt from PST, are now subject to HST.
To its credit, the business community, which is being asked to pay more in income taxes to help pay for this HST rebalancing, is reacting positively. It recognizes the long-term value of the tax and its fundamental efficiency, but also unselfishly realizes that the tax must be much fairer towards consumers, and must be seen as being much fairer.
This “Hail Mary” play by the Clark government may save the tax, and maybe even save its own bacon.