BC Court To Decide On HST

by Mike Godfrey, Tax-News.com, Washington

19 August 2010

A Canadian court is hearing arguments over the legitimacy of the recently introduced harmonized sales tax (HST) in the province of British Columbia.

Despite having succeeded in mustering 700,000 signatures from British Columbian taxpayers, former BC Premier Bill Vander Zalm’s campaign to force a repeal of the HST in the province must wait until a court decides whether Vander Zalm's FightHST campaign now has the right to force a vote on the tax in the provincial legislature or a referendum.

Vander Zalm has argued that the adoption of the HST Bill, solely by the Cabinet, was unconstitutional because it should have been voted on in the provincial assembly. While a bill to repeal the provincial sales tax was approved by BC lawmakers, the legislature did not hold a vote on whether to approve the HST.

According to the Canadian Initiative Act, as cited by Vander Zalm, a successful initiative petition should result in the petition bill being sent to a Standing Committee of the Legislature who may submit it to the Legislature for a vote, or send it back to the Chief Electoral Officer with instructions to conduct a non-binding, province wide Initiative Vote.

However, business groups are opposing the initiative in court, arguing that repealing the HST would cause further uncertainty for businesses of all sizes in the province.

The HST took effect in British Columbia on July 1, amalgamating the Provincial Sales Tax (PST) and the Goods and Services Tax (GST) into a single 12% tax. The tax is controversial as it introduces tax on a number of items which were exempt from PST previously.

Recommended