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.