Chris Delaney: Finance Minister Colin Hansen’s magical HST land doesn’t exist

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      By Chris Delaney

      Finance Minister Colin Hansen has said repeatedly that implementing the HST is the best thing he can do to stimulate the economy and create jobs. That is good to know, because when his government finally caves in and abolishes the HST, we expect Minister Hansen to resign immediately. After all, if he thinks the HST is so good, then cancelling it must be really bad, and a finance minister with any integrity would never put himself in the position of harming his own economy, right Colin?

      But since he believes the HST is so terrific, how about some specific examples of where this type of tax has proven itself an effective economic and job creating tool?

      Here in Canada, we have the HST in Newfoundland and Labrador, Nova Scotia, and New Brunswick, the three perennially poorest provinces in the nation. Newfoundland, even with the discovery of offshore oil, has the highest unemployment rate in the country at 15 percent—no jobs boom there.

      Nova Scotia has no significant industry and a $9-billion budget deficit in a province of 900,000 people ($10,000 of overspending for every man, woman, and child in one year alone)—despite their terrific HST. No economic boom there. They are now raising it from 13 percent to 15 percent on July 1 to celebrate Canada Day—the same day as B.C. and Ontario get theirs—soon to be renamed “HST Day” in honour of the privilege of having one.

      So, let’s try Europe, where the HST (called a Value Added Tax—VAT) is such a great economic booster that several governments there are teetering on the verge of collapse. Greece is the most prominent example, but is by no means the exception. There, the VAT is 19 percent and is applied to everything, including food and groceries. It is estimated that nearly 80 percent of Greeks do not pay taxes anymore. Bribes are commonplace, and the underground economy has grown larger than the main economy.

      In Britain, the VAT was 14 percent. Direct losses due to VAT avoidance there were estimated to be between $20 billion and $30 billion per year. When you factor in lost income taxes not reported due to the VAT avoidance (can’t report the income or you’ll be caught cheating on the VAT), the losses are nearly inconceivable. The British Labour government’s solution? Raise the VAT to 17 percent and add it to groceries. Starting to see why they lost the recent election?

      In some other European countries, like Denmark and Hungary, the VAT is 25 percent. It is so high governments there hide it in the price of goods and services to keep the people from revolting. Now that the eurozone is collapsing under excessive taxation, stagnant growth, and government overspending to compensate, can we at least agree the HST there didn’t create the economic boom the Liberals are trying to sell us on here?

      So just where is this magical HST land where the economy is booming and jobs are being created due to such a tax? Alberta—woops—no takers. Manitoba? Wrong again. Saskatchewan? Nope—they tried it in 1991 and got rid of it, and the government who gave it to them! Imagine that. They actually got to try the benefits of this wonder tax for 1.5 years and threw it out the first chance they got. What ingrates.

      If only they had Colin Hansen’s Liberal vision for the people: a chicken in every pot, a (used) car in every garage, and an HST on everything.

      Makes you think the sky’s the limit, doesn’t it?

      Chris Delaney is the lead organizer for Fight HST.

      Comments

      21 Comments

      AWP

      May 21, 2010 at 7:33pm

      Do your research Mr. Delaney, academics from SFU and UCalgary have all published reports saying that after the short term blip, HST will benefit the economy. Even Wikipedia says the same and I quote:

      "Over 130 countries have moved to harmonized sales tax systems including four Canadian provinces.[3][5] Evidence from numerous studies shows that harmonization raises business investment and that PST-type taxes slow down provincial growth. The HST is set to replace the PST, a cascading tax system which has been abandoned by most economies throughout the world.[2]"

      as far as your leader Mr VanderZalm goes what is the old saying? " fool me once shame on you, fool me twice shame on me" he fooled me once when i supported his campaign for premier....Never again and its is sad that you have all those canvasers out and they can't even explain how HST will reduce the cost of business...they don't belive it because you and Mr. VanderZalm don't want them to know. As a side issue all the developers and restaurant industries supporting your campaign..are they going to use the cost savings to reduce prices or increase wages or are they just going to silently pocket it? Maybe Mr. VanderZalm could comment on this. That could be interesting.

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      tim

      May 21, 2010 at 11:26pm

      does anyone smell a bc liberal staffer at work?
      *cough* AWP *cough*

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      DC in BC

      May 22, 2010 at 7:42am

      Great article, Chris. Thanks for your point of view.

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      Camero409

      May 22, 2010 at 8:02am

      AWP your right! All those studies and nothing but success! By the way, which countries enjoy success with VAT? I don't see any in you post. Surely Wikipedia will have a list of the most successful HST countries. Does China have HST? India? The rest or SE Asia? Brazil? They don't have time for HST, they're too busy building industries that are leaving Europe, Canada and the US and relocating there. I don't know who's rear your head is up but it must be Colin Hansen's because you can't hear anything else and/or listen to anyone elses opinion other than the LIbERalS!.

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      pippatch

      May 22, 2010 at 8:36am

      Wikapedia has been known to be wrong. Academics are where they are because they can't function in the real world. Ask 'joe public' about prosperity and the HST!

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      Stryder

      May 22, 2010 at 12:34pm

      It dosn't make any difference how many countrys have HST, the issue is whether it is good for the poulation of BC or not. The whole world is in trouble because everybody followed a fatally flawed economic model (Bushism) and now we are all paying for it. BC already has the lowest business taxes in the world, do we really want to let companys use, abuse and deplete BC resources and not contribute to the prosperity of the citizens of BC. All we have to show for these low business taxes so far, is the lowest minimum wage in Canada, the highest child poverty rates, the highest housing costs in Canada and a whole lot of taxes and fees that we have never had in the past. Not my idea of progress.

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      AWP

      May 22, 2010 at 12:49pm

      Sorry Tim to dissapoint you and the rest of you ilk with your conspiracy theories when someone doesn't agree with your "informed view " "cough cough"
      Not a Liberal Party Staffer nor neve have been. Was a Socred Party member when the Zalm ran but now just an old retiree who happens to have a accounting designation which allows him to be a bit informed and more concerned with the long term economy for my kids than the cost of gourmet restaraunt meals and mega land developement.

      leave the comments to those who have a rationale opinion whether they agree with HST or not. You are lacking in the ability to interact intelligently so follow Mr VanderZalm he thrives on people such as you.

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      Elephant in the room

      May 22, 2010 at 3:37pm

      The point that Mr. Delaney's article has only barely touched on is the REAL reason why all the countries he points out have crumbling economies: back-breaking deficits and debt. Moody's isn't downgrading Greece's debt rating because of their sales tax rate. The EU isn't putting together trillion-dollar rescue packages to cover tax fraud losses. In fact, sales tax rates are a drop in the bucket compared to the out-of-control-spending craze that's taken over the world's governments like a bad internet fad.

      This is the reason I will never, ever, EVER, vote NDP: they restrict people's ability to do business, write blank cheques for social programs, and do nothing but scapegoat when we start running into employment and revenue problems. Interest rates ARE GOING to rise in the coming months and years; we can't simply run up our debt now and hope things get better tomorrow.

      So if you are SO adamantly against this horrendous tax increase, you better answer one question before signing the petition: where do I want necessary cuts in government spending to come from? Cause if we wait until we're in the same boat as the Greeks, the choice is going to be out of our hands.

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      WildBill

      May 22, 2010 at 9:12pm

      Forget the HST, get rid of the PST, and cut government services accordingly. No taxes and pay as you go. if you cannot afford it, too bad, so sad, go talk to Chris.

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      ds

      May 22, 2010 at 9:35pm

      If the leaders had any backbone to start with they would show real leader ship by rolling their own wages and pensions back instead of everyone elses and then giving them selves a huge increase in both. And then they want the rest of us to follow and just add more expeses on our plate while they eat off golden ones. I don't think so. Tell it to the mother who is sending her child to school on the bus because their school has been closed and she doesn't have enough in the fridge to make breakfast or someone who has to chose between food and housing. What the so and so is the matter with you folks who want to pay more.

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