Musings on a Tax Grab

By Submitted Article

by Del Archer

It seems that B.C. Premier Gordon Campbell and his Liberal government today find themselves, at the very least, in “a very inconvenient corner” .. at worst, having to consider a retreat from a key economic initiative that has raised the ire of an awful lot of British Columbians .. the proposed HST, a blending of the GST and provincial sales tax. 

Anti-HST forces, led by one-time Premier, Bill Vander Zalm, have confounded the political “experts” and hack media columnists, by persuading (without too much difficulty, apparently) more than 15 percent of voters in all 85 provincial ridings to sign a petition which calls on the government to dump the tax plan. 

Campbell’s popularity and that of his government, has plummeted to such an extent that the Premier himself has tried to joke about it. But, jokes are not appreciated by a significant number of B. C. voters who don’t like the idea of having to pay more for an increased number of goods and services. 

I live in Nova Scotia, one of the three Atlantic Canadian provinces to pass HST legislation a few years back and during the B.C. .. and indeed, the near-simultaneous Ontario campaign to follow Atlantic Canada’s lead, any number of “experts” have been quoted as saying the HST is a “good” thing. 

My question is this ..a good thing for who? (or whom if you want to get technical about it.)

Interestingly, the HST pro forces frequently quote Michael Smart, a University of Toronto economics professor, who claims the introduction of the HST in this part of Canada was immediately followed by a measurable increase in business investment in the area. His study has been challenged as flawed .. short on specifics and long term, successful, examples. In fact, the opposite appears to be the case. 

Nova Scotia’s newly elected NDP government is struggling with a huge deficit and one of its solutions is to re-introduce the two percent cutback in the sales tax offered up by the Federal government a couple or so years ago.  As of July 1^st, Nova Scotians will pay a 15 percent blended sales tax .. the highest in Canada. 

To sell the plan, our finance minister staged a highly publicized ..and highly criticized .. series of so-called town hall meetings, ostensibly to get input from business leaders and ordinary voters on what course the government should follow. “Cut the fat from government” was the clarion call. “Honour your pre-election promises and don’t raise taxes” was the other. 

Come budget day, tax increases, including adding two percent more to the 13 percent HST, were the order of the day. Cutting the fat .. not so much. 

So, the HST is driving Nova Scotia prosperity, is it? Please note I mentioned the government’s desperate need to tackle the huge deficit left by the previous Tory administration. The Tories did very little, if anything, to attract new business to the province. The offshore oil industry happened in spite of the government and call centres sprang up and disappeared almost as quickly.

So much for new business. 

Tourism, the lifeblood of Atlantic Canada, is faltering badly and Joyce MacDougall, president of the Sydney and Area Chamber of Commerce, frets that the two percent hike in the HST will deal another blow to that industry in this province.

John Ouelette, president of the Strait Area Chamber of Commerce, said the NDP government is relying too much on tax hikes and not enough on cuts .

But, ranking economists, including former Bank of Canada Governor, David Dodge, have signed an open letter in which they say they strongly support implemntation of the GST because, in their words, it will promote investment, jobs and higher wages.

In Atlantic Canada, they’ve heard it all before and still don’t believe it. What governments and their apologists and economists of all stripes seem to choose to ignore is this. At the bottom of all of this verbosity and grand scheming … is the taxpayer. The taxpayer who is asked to pay another two percent on top of the existing13 percent for goods and services with few exceptions .. Only diapers, children's clothing and footwear, and feminine hygiene products are exempt in Nova Scotia. Yes, there are some rebates .. a provincial tax rebate is available on heating oil for some targetted economic groups, for example.

If the HST passes in B.C. and in Ontario, pay attention to the newspaper headlines, the radio talk shows and the television newscasts. I’ll be astounded if the reaction is not swift and furious when people discover that this so-called “friendly” tax is added to virtually every purchase they make.

And, oh, by the way, very few of those consumers will be getting an instant income increase to help pay for those purchases.

-Del Archer

 Del Archer is a  news consultant and a member of the Radio and Television News Directors Association, he is the former Vice President of News and Public Affairs at CFCN Calgary.  He currently lives in Nova Scotia.

Email | Print | Facebook | Twitter | Digg | Del.icio.us