NDP admits it will be tough to kill the HST

    1 of 1 2 of 1

      There is no easy way to undo the harmonized sales tax, even if Gordon Campbell and the B.C. Liberals are no longer in power.

      NDP finance critic Bruce Ralston says that untangling the HST isn’t as simple as some might think.

      Even if New Democrats were to form the provincial government in 2013 and serve notice to the federal government that they intended to end the unpopular tax, the HST isn’t going to disappear in an instant, according to the Surrey-Whalley MLA, who’s also a lawyer.

      An NDP government would try to negotiate a “better deal” leading up to the cancellation of the tax, Ralston said. “Once the tax is implemented as it is, it becomes more complicated to disengage from,” he told the Georgia Straight in a phone interview. “I mean, some people have said that you could just snap your fingers and get rid of it. I think that is administratively not realistic.”

      The second-term MLA is familiar with the terms of the Comprehensive Integrated Tax Coordination Agreement signed by Finance Minister Colin Hansen and his federal counterpart, Jim Flaherty, in November 2009.

      The CITCA states that the termination of the agreement establishing the HST in B.C. “cannot be earlier than the date that is the fifth year anniversary” of the revenue measure’s implementation. The tax took effect on July 1.

      While one government may notify the other of its intent to withdraw earlier than five years from the tax’s implementation, the deal specifies that this will be “effective no sooner than the end of the eighteen month period that immediately follows the last day of the calendar quarter in which the written notice of termination is received or any other time period that may be mutually agreed upon between the Parties”.

      This means it could take up to 21 months to terminate the HST after the federal government is given notice.

      Then there’s the matter of the $1.6 billion in federal transfers given to the B.C. government to help the province transition to the HST system.

      Explaining that the CITCA is a five-year agreement, Ralston said that either the entire $1.6 billion or the portions that have already been delivered to the province will have to be paid back if the deal is ended prior to 2015.

      “We fought the tax as hard as anyone,” he said. “But now that it is implemented, to find a way out is going to involve negotiations.”

      In a letter to Hansen dated March 2, Flaherty wrote that Ottawa had agreed to the provincial government’s proposed schedule of HST transition-funding transfers. These are $250 million within seven days of the tabling of legislation winding down the provincial sales tax, and $769 million on the first day following the implementation of the HST.

      The remaining $580 million is due on the first business day after the first anniversary of the HST’s implementation.

      It’s the federal government that administers the tax, and according to public-policy professor Doug McArthur, the 18-month notice period provided under the CITCA gives federal authorities time to adjust in order to revert to the goods and services tax. Businesses would also have to reprogram their systems, while the provincial government would have to reinstitute the provincial sales tax.

      “All of them can be done, but they’re not simple to do,” the professor told the Straight by phone.

      McArthur, who teaches at SFU’s graduate school for public policy, didn’t know whether it would be legal for the provincial government to unilaterally decide that it doesn’t have to adhere to the notice period stipulated by the CITCA.

      Doing away with the HST will also involve the fiscal challenge of deciding whether or not the tax is actually good for the economy, according to UBC law professor David Duff.

      “Economists would tell you that a sales tax of the type like the HST or the GST is a better tax than the former PST, and the reason why is because there’s this whole system of giving you tax credits for business inputs so you don’t get layer upon layer of tax if there are various stages in the production process,” Duff told the Straight by phone. “If you have an economy that exports, value-added taxes don’t apply to the exports so you don’t have this so-called cascading of taxes, and also your exports are more competitive.”

      In a phone interview with the Straight, Chris Delaney, the lead organizer of the Fight HST campaign, downplayed the challenges involved in scrapping the revenue measure.

      Delaney said that it will be a “little bit awkward” if the province opts out of the HST deal early. He laid the blame squarely on the B.C. Liberals, saying, “It’s stupid that we have to do this, but that’s their fault for being idiots.”

      {poll node='340478'}{/poll}




      Aug 26, 2010 at 6:50am

      It doesn't matter how long it takes. In the meantime the elite, big business and mult-nationals will enjoy our hard earned money while we suffer poorer medical services, education, social services, higher taxes on items not taxed previously. We will pay more tolls for bridges we could have and should have paid for with our hard earned tax dollars. Instead that money is give away to a few. Insanity!


      Aug 26, 2010 at 6:55am

      There is also the legality of the way the tax was implemented. If it was done illegaly then, by law there should be no tax. If that is true then there should be no long legal wrangling to do, simply set up a repayment schedule.

      Ed Anderson

      Aug 26, 2010 at 7:21am

      The problem with this current Govt System is that if the public starts an initiative it's not BINDING on govt. The second problem is if a govt messes up, the following govt which gets into power is not responsible for cleaning up the mess. NO accountability. The third problem is the HST was implemented by Ottawa through Colin Hansen and Gordon Campbell. This in itself is unconstitutional if you look at section 92 & 93 of the BNA act of 1867 says that it's upto the province to implement taxes and the taxes need to be put back into the Provincial and Municipal economies. Federal Govt has no jurisdiction over forcing taxes on provinces.4th Problem is The People were not informed of all the specifics of this HST tax like the 5 year contract so it's not full disclosure to the public. This is nuthing more than the tactics of Military Regimes on a need to know basis. However don't dispare! We have a plan that has been working for over 150 Years in Switzerland . It's called Direct Democracy where the public gets to vote on any and all Legislation before it gets passed or vetoed by the people. Also the people become the soul authority of their province and define and limit their govt powers. then the people deal directly with Ottawa and only pay for services Rendered like RCMP , Fisheries for example. We are the BC Refederation Party and we want to put you the people into power. http://refedbc.com/siteB/

      glen p robbins

      Aug 26, 2010 at 7:54am

      This is the wrong move by Ralston. Trying to explain how difficult it is -- presumes the public/voters care about the complexities of the deal --and makes the NDP look like they are apologizing for their future intentions.

      A smart politician in this climate of mounting hatred of all things government, everything BC Liberal - BC Government---(Ottawa too - no majority and none coming soon) will keep it simple and speak to the people of British Columbia on these terms:

      "I will rip up the HST agreement the first chance I get - I won't pay Ottawa back one dime because they were complicit in causing the problems -- and if whoever happens to be government at the time - doesn't like it -- British Columbia will move to close every federal office in the province -- and collect all of own taxes----------screw Ottawa were opting out"

      Quebec is heading toward separation -- Charest's Liberals are dead over patronage court implications (guilty or not) - and BC can use this for its own advantage---I would not only just say I'm going to do this - I'd promise it.

      That's leadership -- the rest of this is simply cowardice - or as famous politico W.C. Fields once said "looking for loopholes" - there aren't any -- Flaherty and Hansen (Harper and Campbell) knowingly colluded - knew the people hadn't been given an opportunity -- and if it were me running the ship I'd have the balls to tell them straight and right now how its going to be - not this weak shit - from more weak actors - who ought to get off the stage and let some of us who are unafraid handle the heavy lifting.


      Aug 26, 2010 at 7:56am

      There isn't even an election going on and the NDP are already trying to loose it. Has the NDP even noted how many people signed the anti-HST petition?


      Aug 26, 2010 at 8:01am

      Wow. A small sniff of victory and James and the gang go from being champions of the people to politicians again. Very typical of the exceedingly timid and increasingly business-first NDP.
      Man, do we ever need a viable, democracy-first third party in this province--or we could just get a NDP leader who actually has guts and a true commitment to the people.

      Stan Mortensen

      Aug 26, 2010 at 8:42am

      Peter Ralston is absolutely correct, the process to withdraw will be complicated. The Feds' appear to have learned from their experiences in Saskatchewan and Manitoba and crafted an agreement that our wonderful government in BC appear not to have done any negotiations on. I can almost picture it, Flaherty saying sign here and here and Huggie Hansen just jumping up and down like a jack russell terrier saying where do I sign, where do I sign, wagging his tail rapidly in excited anticipation of the treats to follow.

      This deal on the HST was not part of their mandate (contract with the voters) during the last election. This government needs now to defend itself, it needs to do the honourable thing which is to seek a clear mandate on this and other issues.

      Of course, honour seems to be an alien concept.

      Jim Van Rassel

      Aug 26, 2010 at 8:54am

      Like a dog with a fresh new bone, licking it and dreaming how good it's going to taste, only to have someone try to take it away. GOOD LUCK! The NDP are no different then the rest. Yes it is as simple or as complicated as one makes it. They put in the HST, in a matter of months, you sure as shit can take it out in months. Be a god dam leader Carole or get lost.
      Jim Van Rassel
      Coquitlam BC

      DC in BC

      Aug 26, 2010 at 9:04am

      Whether the Hated Sales Tax is cancelled or not, by whomever is in power here in BC, I have been, for some time, already and will continue to cut back on my discretionary spending. BC (Bring Cash) is an extremely expensive place to live (greater Victoria) and unfortunately the retail and hospitality sector is going to see a lot less of my after-tax dollars.


      Aug 26, 2010 at 9:10am

      the bc liberals are such losers. they lock themselves into 5 year deals and crazy agreements.