Gabriel Yiu: The bankrupt promises of the B.C. Liberals' HST

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      Last October, in order to slow his sharp slide in popularity caused by the HST, B.C.'s then-premier, Gordon Campbell, spent $240,000 to buy a half-hour TV advertisement to make an important announcement.

      The premier spent the first half to promote the so-called advantages of the HST. Then, he declared that in order to relieve the burden on consumers caused by the expanded sales tax, the government would introduce a 15-percent cut in personal-income tax, starting January 1, 2011.

      The premier further explained that for people making $50,000 annually, this meant a tax reduction of $354.

      If a person's income was $72,000, then the annual tax saving would be $616.

      Campbell’s tax cut came as a shock to many because not that long before, he and then-finance minister Colin Hansen had challenged those opposed to the HST by asking them whether they wanted to cut health care or education to repay a $1.6-billion signing bonus to the federal government.

      But suddenly, the B.C. Liberal government had the money to cut income tax within two months!

      Unfortunately, Campbell’s promise was simply another B.C. Liberal dishonoured cheque to deceive British Columbians.

      Half a year later—less than one month before the referendum on the HST—the B.C. Liberal government is in the give-away mode again.

      This time, it offered to give $175 to a child or a low-income senior (the cheque would probably be issued prior to the provincial election, which will likely take place this year).

      There is also a promise to lower the HST by one percent in July 2012, and another one percent in July 2014.

      The B.C. Liberals now say that cancelling the HST would cost $3 billion. This time, the government will spend $5 million of taxpayers’ money promoting the new HST.

      Basically, the HST was the B.C. Liberals' big lie in the 2009 election. In order to pacify the public, the B.C. Liberals relied on other lies and misinformation to cover up the HST lie.

      However, the lies and misinformation have been exposed time and again—and they often contradict what was said earlier. The more absurd part is that the B.C. Liberals and their bully boys accuse their critics of misleading the public.

      Let’s review some of the lies and misinformation about the HST.

      In the 2009 election campaign, the B.C. Liberals put down in black and white that they had no plan to implement the HST because it is bad for consumers.

      After the election, Hansen said that was not a "promise" and the B.C. government had not studied the question of bringing in the HST before the election. It was only after the provincial election that the B.C. Liberals began to study implementing the HST.

      The fact is, the premier’s think tank, the B.C. Progress Board, had studied the question of implementing the HST in B.C. and submitted a report to the government in December 2008.

      It was also revealed that prior to the May election, officials in B.C.'s finance ministry had negotiated with the federal government concerning bringing in the HST. In addition, Hansen's deputy minister had submitted a special report on the HST to the finance minister before the election.

      When the premier and finance minister announced the HST, they said it was revenue neutral and that the provincial government would not collect extra tax as a result. They also told British Columbians that bringing in the HST was the best thing the B.C. Liberal government could do to revive the stagnant economy.

      However, later the B.C. Liberals claimed that they never said that the HST was revenue neutral. Recently, they finally admitted that the government collected hundreds of thousands of dollars in additional revenue due to the HST.

      The media also revealed that before implementing the HST, the provincial government had already received a report that said the implementation of the HST would have negative effects on B.C.'s economy in the first five years.

      Meanwhile, the B.C. Liberals said last year, before implementing the HST, that the tax would create 113,000 new jobs by the end of the decade. Recently, they changed their tune to creating 23,000 in 10 years (i.e. an average of 2,300 jobs per year).

      The fact is, according to Statistics Canada's figures, B.C. lost 30,000 jobs from July last year to April this year.

      The B.C. Liberal government had said consumers would pay less because of the HST. Hansen claimed that the public would not pay extra for buying a house with a half-a-million-dollar price tag. That was because the B.C. government would offer a five-percent rebate, and the cost of the house would be two-percent cheaper due to savings created by the embedded tax.

      The fact is, B.C.’s housing prices have not been reduced due to the HST. Anyone with some common sense understands that in the housing market, a house is priced according to the market and not according to the cost of construction.

      What the B.C. Liberals said about prices being lowered due to the embedded tax is a big joke.

      In addition, the B.C. Liberals have not gone out of their way to tell the public that if they purchase a new house as an investment, or for their children, then they don't qualify for the HST rebate.

      As for the B.C. Liberals’ claim that the HST will lower prices, the provincial government did just the opposite. Since the HST would lower the provincial liquor sales tax from 10 percent to seven percent, the finance minister gave instructions to raise the prices of all liquor products. Yet, the B.C. Liberals expect businesses to lower their prices.

      It is puzzling that this latest important announcement about future reductions in the HST was not made by Premier Christy Clark, who usually likes to speak and smile before the camera, but by the wooden finance minister, Kevin Falcon. What is the reason, I wonder.

      It might be because Clark had said just a few weeks ago: "People will see that (lowering the HST) as buying them with their own money." Or, did she have doubts herself about the chance of the promises being honoured in two to three years' time?

      There is no doubt that the B.C. Liberal brand is bankrupt. No wonder its leaders are talking about changing the name of the party. But is changing the name of the party or its leader enough to regain the trust of British Columbians?

      Gabriel Yiu is a small businessperson and the former NDP candidate in Vancouver-Fraserview.

      Comments

      21 Comments

      Ken Lawson

      May 28, 2011 at 6:06pm

      Must be at a rate of 9% or Im Voting NO

      Steve Y

      May 28, 2011 at 6:25pm

      Oh my god. Leftists are so stupid .... quote " Anyone with some common sense understands that in the housing market, a house is priced according to the market and not according to the cost of construction" Really Gabriel? Construction costs don't affect the final sale price of a house? I suppose this is why the rest of the leftist morons in this province also think that the ALR doesn't raise prices of housing, taxing the hell out of developers doesn't increase the cost of housing, and protesting every time someone wants to put up a housing unit taller than 3 stories doesn't increase housing prices. No wonder we have so many homeless in the province with people like Gabriel trying to be in charge around here.

      LostMyGlasses

      May 28, 2011 at 7:36pm

      2 Points
      1. The 140 some odd countries using VAT's don't all use the same system. Some, like many northern European one's have many items and sectors of the economy in a lowered bracket, some as much as 1/3 the highest HST bracket. In France, for example the HST is 19.5% for general items, 5.5% for books and food, and 2.1% for drugs for patients on social security.

      Even if you wanted to consider harmonization, this isn't the correct model for this province.

      2. The $350-whatever figure the government says it costs each family under the HST is garbage. The $350 figure is calculated based on the theory that 90% of the savings businesses receive through harmonization are passed along to the consumer. I don't think anyone reasonably believes that theory is a 'real world' theory.

      Economists love to gamble though, they want us to gamble billions of taxpayers dollars in a massive shift on a theory that big business will pass its savings to us.

      Vote Yes, Destroy this tax, call a general election, then hold an entire summers worth of tax consultations to get the right tax in place that truly balances consumer, taxpayer, small business and big business-with transparency.

      The HST is good policy

      May 28, 2011 at 7:53pm

      But Seth Kline of the CCPA agrees that the HST is economically more efficient than the old PST.

      " I accept the arguments that a value-added sales tax such as the HST is more economically efficient than the old PST."

      http://www.straight.com/article-394451/vancouver/seth-klein-why-im-votin...

      If you are worried about fairness, then increase the HST rebate, or increase the corporate tax rate.

      The social democracies of Sweden and Norway have VAT rates above 20%.

      http://worthwhile.typepad.com/worthwhile_canadian_initi/2009/08/economic...

      Voting to eliminate!!!

      May 28, 2011 at 9:11pm

      I cannot believe for the life of me that some British Columbians are so stupid for even re-considering keeping the HST because the government has decided to lower it to 10%. This is the same government that said it had no plans to introduce it, then introduced it and passed it shortly after getting elected! The government then claimed it wasn't on their agenda at all, but a report obtained by the media suggested otherwise!

      Now they are promising if we keep it, that seniors, and families with children will get a one time payment of $175. What the heck does $175 get you these days??? Diddly squat!!! How soon after they "give" us this rebate will they make it up? Are people seriously that naive? Let's take a look at a few of the items that were exempt from the extra 7% in BC (old PST) prior...

      -Restaurant meals, and drinks
      -Houses
      -Children's clothing
      -Post secondary tuition
      -Construction costs
      -Portion of cable bill

      There are others, but these ones come to mind immediately for me.

      This is the same government that sold off BC Gas to Americans...the company they sold it to is partly owned by George "Wacko" Bush of all people! This is the same government that privatized BC Rail. This is the same government where Christy Clark served as Education Minister, and did nothing!!! Now this is the same government that wants to help "improve" the HST??? Vote to eliminate the HST, then vote to eliminate these crooks!!!

      Scott Blackstone

      May 28, 2011 at 10:17pm

      I am now officially sick of the stupid HST. Let it be and shut up about it. What absolutely no one in this entire stupid "debate" has pointed out is that ultimately, it doesn't really affect the strata of society. Sure, there may be some regional macro-economic effects, but whether we have the HST, PST, or something else entirely, the rich will still be rich, the poor will still be poor, the middle class will still be whatever they want to be (upwardly mobile, downwardly mobile or static) and nothing will change. All this hair-splitting over a few hundred dollars a year of tax revenue is starting to get nauseating, and ignores entirely the fact that sound government fiscal policies have a much greater impact on the balancing of their budget than methods of revenue.

      I cannot name one person whose life has changed in any way at all over the last 12 months because of the tax system.

      In the future, I will vote for whatever party decides to just leave the damn taxes alone and concentrate on anything else.

      Periac

      May 29, 2011 at 12:04am

      The one thing that everyone has failed to report about.

      I seem to recall when the HST got brought in the Liberals promised that any additional revenue (of couse there wasn't supposed to be any additional revenue since it was revenue neutral) would go to fund healthcare.

      That seemed to go out the window since it's generating 300 to 500 million.

      Geo Gazes

      May 29, 2011 at 1:47am

      ScottBlackstone, you know one, me. I am disabled. My CP pension gives me a little under $800/month. My husband had a series of heart attacks last year. It has been very difficult for him to return to work. We had a 3 month buffer saved up. It's long gone as is the car, cable, phone, (we pay as we go). Bus fares were hit by the HST. Food stuffs not so much but all the non edible things you pick up at the grocery store has. As has suppliments and personal products. I'd say we are short close to $50 a month. Nothing left to sell, a trip to the library is the highlight of the week. The HST sucks. All British Columbians were lied to by Hansen and Campbell, again. Now Crusty is giving us her grin and the finger with her "fixing" the HST. Bull. The tax must go, return to the old system with all the old exemptions. I'm sure Harper hasn't given her the full payout yet. He's a cold and black-hearted evil man who's dismantalling of Canada is moving apace but I'm sure he'll withhold the balance of the 1.6 Billion til she has convinced him she's got it under control. And Crusty, you don't and you won't.

      The HST is good policy

      May 29, 2011 at 3:58am

      @ Geo Gazes,

      Assuming that you and your partner makes nothing more than your CP pension (~$10K per year, each), you would get an HST rebate of $500 per year.

      http://www.cra-arc.gc.ca/bnfts/clcltr/gstc_clcltr-eng.html

      The old system would not means-test the exemptions.

      If you are still worried about impacts to lower-income families, you can always increase the HST rebate.

      Scott Blackstone

      May 29, 2011 at 8:36am

      Hello "Geo Gazes", if what you're saying is true, both you and your husband are eligible for EI, your husband for Sickness Benefits, and you are eligible for Compassionate Care Benefits. Also, if your husband has had a series of heart attacks, he's eligible for CPP Disability benefit. Under your circumstances, the two of you should be able to derive an income closer to $4000/month, and shouldn't be affected by the HST at all.