‘Families win with HST cut’

Cut would come in two phases, after referendum

Finance Minister Kevin Falcon explains the impact of scrapping the HST to reporters in Victoria Wednesday.

Finance Minister Kevin Falcon explains the impact of scrapping the HST to reporters in Victoria Wednesday.

So how does an HST of 10 per cent in three years sound? Is it enough to persuade you to vote no in next month’s mail-in referendum that asks whether the harmonized sales tax should be “extinguished?” HST hater Corisa Bell doesn’t think so. “Obviously, this is just buying votes. They say that, then they’ll just raise it,” and she doesn’t believe people will change their opinion on the tax. Bell organized the Done with Dalton recall campaign this spring that collected about 2,500 names in an effort to force MLA Marc Dalton to run in a byelection in Maple Ridge-Mission. She pointed out the tax is still being levied on items that weren’t previously taxed under the provincial sales tax system such as chiropractic and physiotherapy treatments, adult-sized kids clothing, sports lessons and team registration fees. The growth of an underground economy, that she says developed in Europe, is also a concern. Dalton, though, says it’s up to British Columbians to decide if they like the new numbers and decide to support the HST. “I think it’s positive, I really do.” Dalton said during telephone town hall meetings this spring, involving more than 275,000 people and which drew feedback from 5,000, that the No. 1 comment on how to improve the tax was to reduce its rate. The HST currently stands at 12 per cent, reflecting a five-per-cent federal goods and service tax and a seven-per-cent provincial sales tax. Finance Minister Kevin Falcon made the announcement Wednesday as the government tries to make the tax more palatable before the vote. The reduction will come in two stages, from seven to six per cent provincially by July 2012, followed by another reduction to five per cent on July 1, 2014. With a five-per-cent GST, the combined rate would be 10 per cent. Dalton pointed out that the new plan will save the average family $120 a year, compared to what they paid under the PST, while the present HST costs an extra $350. “With this reduction, every single family comes out a winner.” To help pay for the cuts, the government would hike its corporate taxes from 10 to 12 per cent on Jan. 1, 2012. That coincides with a federal tax cut of the same amount, keeping the overall corporate rate unchanged. “There was definitely a perception that the HST benefited the corporations, but not as much the general public. To help, the government’s also giving a one-time transitional grant of $175 to families, per child under 18, as well as low income seniors in 2012. The government wanted to implement tax reductions in a fiscally prudent way as it works to balance its books, Dalton said. “The bottom line for all British Columbians is that they’re going to be ahead.” And while the HST is trimmed, the HST credit cheques the government issues to low-income people won’t change. “I think it’s positive, I really do.” Dalton said of the 140 countries that use the HST system, nobody has gone back to the PST-style tax. He said it would have been administratively difficult to offer tax breaks or discounts on items such as bicycles. The lower tax rate more than compensates for the HST’s broad approach, he added. He disagreed with Bell’s statement that the HST is now a federal tax. “That’s not true. That’s not true at all. We control the tax rate.” B.C. will have the lowest HST rate in the country. Nova Scotia’s is 15 per cent. “Obviously, we control the rates.” Maple Ridge senior Renee Tyson, who complained to Dalton about his initial decision to look at the names of those who signed the recall petition, says the tax cut may do the trick. Dalton reversed his decision on the names. “I really feel a lot of people will be quite satisfied with that and perhaps not vote at all in the referendum. I think a lot of people will be swayed by that.” Opposition MLA Michael Sather said the government and Premier Christy Clark are desperate. The Liberals are promising to balance the budget by 2013, before the second decrease. He doubts the government will even be able to afford the second decrease and that the HST never will reach 10 per cent. “The numbers are all over the map and Christy Clark is as erratic as ever as I’ve ever seen since Bill Vander Zalm.” The announcement may make the numbers a bit closer, but he doubts the HST referendum will pass. “They’re trying to get over the HST and then call a snap election. I don’t think people are going to buy it.” Elections B.C. starts mailing out HST referendum ballots on June 13 to all registered voters. Friday, July 22, 4:30 p.m. is the deadline for ballots to be received by mail by Elections BC or in person at a Service BC centre.

• To find out more about the HST, go to www.HSTinBC.ca.