British Columbians To Vote On HST

by Mike Godfrey, Tax-News.com, Washington

21 September 2010

British Columbia’s Finance Minister, Colin Hansen has apologized for the manner in which the Harmonized Sales Tax (HST) was introduced but has maintained that the tax is crucial to the territory’s prosperity in coming years.

His comments come after the successful petition by FightHST leader, ex- BC Premier Bill Vander Zalm, which will see a public referendum held on September 24, 2011. 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.

Speaking at a press conference on September 14, Hansen said: “What I would gladly apologize for is that we did not do a better job in rolling out the HST.” He added that: “In hindsight, I wish we had done more to provide British Columbians information as to why the HST makes sense and how it impacts them.”

However, he argued that the referendum presents the government with the opportunity to “focus in on the merits of harmonizing our sales tax, the merits of getting rid of the old provincial sales tax system.”

The provincial government has called on those in favour of the HST, businesses in particular, to be vocal about the positive aspects of the tax system, which the government says will be simpler, fairer and will promote economic growth. Critics, however, argue that the HST has allowed the government to tax goods and services previously exempt under the provincial sales tax.

Those in the FightHST camp, while celebrating success in triggering a referendum, have criticized the terms in which the referendum is to be held, as undemocratic, with doubts lingering as to whether it will indeed be legally binding.

In a statement on September 15, Leader of the Fight HST campaign, and ex-BC Premier, Bill Vander Zalm said that BC’s Premier, Gordon Campbell is "again playing fast and loose with the truth regarding his promise to hold a 'binding, simple majority' referendum on the HST."

“He’s been telling everyone he will make the referendum to scrap the HST truly democratic by allowing a simple majority of votes cast, and that it will be binding on his government. But he refuses to conduct the vote under the ‘Referendum Act’ rather than the ‘Initiative Act’. That means British Columbians will have to take him at his word, and that is not very reassuring given his track record so far,” Vander Zalm’s statement reads.

“The Initiative Act says the vote will be non binding, and that it requires 50% of all voters in the province to pass it, plus 50% in 2/3 of all constituencies. Those are impossible thresholds, and completely undemocratic. The premier admitted that by saying he will not require the vote to achieve those thresholds. But then he turns around and says he won’t change the legislation – we’ll just have to trust him.”

Vander Zalm says making the referendum binding and changing the required threshold is not a decision one person can make, even a premier. “Only the legislature can overrule existing legislation. This is a totally bogus promise designed to con and intimidate British Columbians into accepting the tax. We will not be bullied by this premier,” Vander Zalm rallied.

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, both because of its adoption and as it introduces the HST on a number of items which were exempt from PST previously.

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