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HST scandal - In contempt of the people of BC

By Peter Ewart & Dawn Hemingway

Friday, September 03, 2010 03:46 AM

By Peter Ewart & Dawn Hemingway
 
In British Columbia, under the "Legislative Assembly Privilege Act", the provincial government, acting through the Legislature, can punish or even jail any citizen or citizens that it deems to be "giving false evidence, prevaricating or otherwise misbehaving in giving or refusing to give evidence or produce papers before the Assembly or a committee of it." So it is clear that the government and MLAs have a lot of power to require ordinary citizens to tell the truth.
 
Yet, on the other hand, it is a strange fact of modern life that these very same Ministers and MLAs of the provincial government may themselves routinely mislead, deceive or lie to the citizens of the province and, instead of being led out of the Legislature in handcuffs, receive no punishment whatsoever.
 
Take the increasingly sordid tale of the Harmonized Sales Tax (HST) in the province. For over a year now, both Finance Minister Colin Hansen and Premier Gordon Campbell have claimed again and again that bringing in the HST in BC was not "on their radar" before or during the provincial election in May of 2009, and only became an issue afterwards. 
 
For example, in response to a questionnaire from the BC Restaurant and Foodservice Association, the Liberal Party's official response was "...a harmonized GST is not something that is contemplated in the B.C. Liberal Platform."
 
Furthermore, in the BC Legislature on November 23, 2009, Hansen was asked, by NDP MLA Bruce Ralston, whether there had been any kind of discussion in his Ministry on bringing in the HST: "By discussion," Ralston asked Hansen, "I mean personal contact, face-to-face, or any exchange of memos at the deputy minister level or through the e-mail network or anything. There's simply no discussion at any level between the minister of finance, his officials and the premier and his office and his officials about the HST between January, when it was first raised publicly in Ontario, and the end of May. Is that the Minister's position?"
 
Hanson answered, "That is correct."
 
Of course, this week, government documents obtained by various news outlets through Freedom of Information legislation show that Hansen's and Campbell's statements have been proven to be false.
 
Although large sections have been blanked out, their contents a mystery, these documents still show that the B.C. government was deeply involved in discussions with the Federal government long before the provincial election.
 
When confronted with this evidence several days ago, Hansen claimed that, at the time he answered Ralston, he was not aware that his own Ministry was engaged in such discussions with the federal government, adding that "I was surprised to go through and read the extent of a lot of the back and forth with Ottawa that was obviously there." He has also subsequently said that "None of these inquiries were undertaken at the request of anybody at the political level."
 
Yet emails uncovered in the documents reveal his own officials openly acknowledging that Hansen has been provided with a briefing note on the topic of adopting the HST, as well as other related issues long before the election, and that these were "requested". For his part, Hansen now alleges that he cannot recall reading the briefing note, claiming that "it doesn't look familiar to me".
 
And then there is the question of the "economic benefit" of the HST. Over the last year, Hansen, Campbell and other Liberal MLAs, have repeatedly claimed that the HST is the "single biggest thing the government can do to boost the economy" (CBC News, Sept. 1) and have dismissed any negative effects. 
 
Yet the uncovered documents from Hansen's own top officials reveal something very different. For example, one such document says that "While the long-term economic gain [of the HST] is relatively clear, harmonization will cause a short-term loss in GDP and unemployment .... The study [from the C.D. Howe Institute] suggests that it may take five or more years before the impact on GDP is positive and even longer for real wages and job numbers to recover."
 
Of course, the HST controversy is not the only one in which the BC government has been accused of withholding information and being untruthful. The ongoing BC Rail scandal is a case in point and there are numerous other examples.
 
Many, if not most, people in this province feel that this government is not being honest with them. Instead of honesty and transparency, what we are getting is sophistry, which is defined in the dictionary as "the use of intentionally deceptive or specious arguments or reasoning." The problem is that this government, from the highest minister to the lowest backbench MLA, is riddled with sophistry, and it is using this sophistry to cover up major misdeeds and worse. Day by day, it is demonstrating that it is not fit to govern.
 
What can citizens do, when their own government is in contempt of them, "giving false evidence, prevaricating or otherwise misbehaving"? Not a lot under present arrangements. Theoretically speaking, the government can continue governing for the rest of its term despite serious betrayal and breach of public trust.
 
This is a serious flaw in the democratic process. However, in British Columbia, unlike many other jurisdictions, we do have the mechanism of "recall", which was voted in by over 80% of the citizens of the province. But these same MLAs in the Legislature have made it as difficult as possible for ordinary people to utilize it. That being said, recall is a mechanism that can and should be taken up. If 700,000 signatures can be gathered across the province, as was done with the wildly successful FightHST Initiative, MLAs can be recalled.
 
But we need more such mechanisms. We are entering a new, highly volatile period of human history, in which it is becoming increasingly clear that the people need more control over government. Among other things, we need to strive for political structures where "contempt of the people" and "giving false evidence" by elected officials is viewed as one of the gravest offences of all in our society, and where they are required, by law, to regularly account for their behavior to their constituents and not hide behind sophistry, falsehood and deception.
 
Peter Ewart is a columnist and writer based in Prince George, British Columbia. He can be reached at: <peter.ewart@shaw.ca>. Dawn Hemingway is an educator and writer also based in Prince George.
 

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Comments

Hooray, Peter and Dawn hit the nail on the head. It is ridiculous that citizens are held to a higher standard of veracity and disclosure than are our "representatives" in Victoria...or Ottawa.
What can citizens do, when their own government is in contempt of them, "giving false evidence, prevaricating or otherwise misbehaving"?


I would have to agree with "Nick in Victoria" who posted the following comment on a recent CBC News web site story about the hst:

"I suggest a new law, If you hold a position that is paid by the tax payers of BC and you get caught not telling the truth or withholding information, you lose your job and your pension.

Very simple and to the point. There must be a penalty for not telling the truth or with holding information. We can't keep voting out parties and politicians. We need a better mechanism. Regardless of who you voted for or who you support, we need the truth at all costs."
How can you tell when Hansen and Campbell are lying? Their lips are moving.

Recall is the only answer.
Had Richard M. Nixon served even a short prison sentence for his lies, none following would have dared to breech the sacred oath of office.

deMOCKracy has become the rule, not the exception. Money, money, money.

"Rule of law" is at stake.

Resignation is too good for them. Criminal prosecution to the full extent of the law will send a clear message to future would be violators of the public trust.

I think it is about time for a general strike and a consumer BOYCOTT until the lot of them resign pending criminal prosecution. There! I said it!

And I'm not just talking about the Minister of Finance and the Premier. I am talking about their enablers too [nee MLAs beware] Stay tuned...

John Grogan
Robson Valley East
I agree with that one too charles!
There does have to be some sort of defense against lying,self-serving politicans.
They are out of control!
Probably because the voting public doesn't pay attention to much, until it rocks their quiet little worlds.
Our "elected representatives" have managed to creat a very safe and comfortable little world for themselves up in their ivory towers.
Over the years,they have awarded themselves unltimate power,and it protects their elite positions very well.
It leaves us with little recourse when they screw it up.
They are the "untouchables", for the most part, and they know it.
Fixed election dates also serve the poltician,not the voters.
The "party" system also only benefits the politicans,not the voters.
Obviously,they don't call it a "party" for nothing,if this government is any example!
The attitude appears to be to hell with you all...you can't touch us for 4 years, and we are not leaving!
There does needs to be some accountability for the lies,manipulation,and just plain arrogance.
Taking away some of the perks they have awarded themselves...like pensions...would go a long way to making them toe the line!
It should be a criminal offense to blatantly lie to the public by anyone holding any public office, if it can be proven they did in fact lie.
Seems with the Campbell crew,it wouldn't be all that hard to prove!
Maybe what Campbell should do is go back and meet with the Bilderberg group and find out what they think he should do with the unruly sheeple. Who knows, maybe that is where he is right now since he is nowhere to be found. How dare we sheeple not cooperate with the elitists agenda!
Unfortunately, the middle class has been screwed by the upper class or so-called leisure class through extensive lobbying since about the 1960's.

What's really interesting is that if you look at the 'facts' the average Canadian has done best (higher gdp, etc) with a central or left of center government. BC even had a higher gdp under the ndp.

Less lies, more growth and higher employment.

Yet the right wing, historically poorly educated, conservative supporters act as sheeple and don't question the lies they are fed.

I used to wonder if I preferred my government competent and crooked or honest and inept, now I just want one that won't allow big business to bend me over. I think they're both inept, but one at least won't bend me and my kids over.

Greed, blind greed, is not good. The liberals masking itself as a back to basics, god-fearing, old-fashioned values sort of party merely to get the support of those who actually care enough to vote is wrong. It does a disservice to their supporters who merely believe their lies. I hope people who want justice and fair play realize that the conservatives, in all of their roles in Canada and the States, have historically been hijacked by big business and lied to their supporters.

The real reason I dislike Harper, Campbell et. al. is that they think you and I are stupid and easily played. I'm not and it bothers me that apparently some are. Remember who owns the media and question everything you are spoon-fed. If we all do this maybe we can hope for change.
Good posts above. We do need political accountability, and mechanisms for punishment when they are proven to lie as in the HST situation. To even get close to that we first need a more diverse and sovereign media ownership with real investigative journalism, as well as a break down of the political party system of subordination.

-----------------------

As for the HST the more I think about it the more insidious it appears in its implementation.

Some will argue that it is a consumer tax, and that we should consume less, and therefore this is a good tax to generate government revenue. That is an argument of sophistry that irritates me.

The facts are that the PST was also a consumer tax on consumption, so no real change there.

The real change is the tax on `services` that was not applicable with PST... as well as the other smaller things like children clothing, and classifications of food items ect... but the real change is the taxation of `services`, and the input credit classifications.

It is critical that we need to more narrowly identify what is a `service` if we are to understand what is the economic meaning behind the HST.

A `service` it can legitimately be argued is in fact the component of Canadian labor involved in the gross income. The component of labor is not an input credit under HST law... whereas under the PST the services that were mainly composed of labor were not subject to the tax to begin with.

So the implication of this means as I understand what I am seeing is that we have effectively added a 7% flat tax to the cost of labor in BC to all businesses that is not an input credit for anyone, and therefore is an effective 7% provincial flat tax on incomes disguised as a consumption tax, but ultimately rendered payable on value created by having an employee.

It is sophistry to then be calling it a consumer tax.

The economic effect of this new HST 7% flat tax on BC working incomes is that it takes that new 7% tax from the gross income of a BC based service industry. Since wages can not go down to account for this, the company then has to take the new 7% flat tax on their gross income out of the profit gap that exists between existing costs of their services and the value of those services in which they can make a profit/loss.

A flat tax of 7% disproportionately effects the lower income workers and sectors of the economy, as in a progressive tax policy they would not be taxed if they were below the poverty line... and under HST that poverty line is irrelevant. A single mom on minimum wage ultimately has her labor taxed at the same 7% than an engineer for an engineering firm will be costed to the business bottom line.

In short it will cost 7% more to employ a BC resident, then it would before with the PST. Yet on the other hand it will cost 7% less to buy a foreign manufactured product that can automate or create efficiencies to replace a British Columbian working individual, where as the imported consumer good has in input credit to retrieve any costs in acquiring it for the business, and an employee or human labor does not get the same input credit.

So the economic step back the economists warned about in the private backroom communications that the political class was having I believe recognized that although HST benefits importers of foreign made products, and a manufacturing base that is highly automated with flow through products... the new HST will also have negative implications for the cost and value of employing local workers in British Columbia and in particular would be devastating to highly labor intensive low margin industries that were previously exempt from what is essentially then an employee flat tax that hits the employers gross income.

The implication for this is that globalization wins... particularly the use of off shore manufacturing with labor intensive production... and the people of BC loss (to places like Alberta) when it comes to economic competitiveness in areas that require a high degree of labor skills (we are now at a 7% disadvantage in the knowledge economy). Gordon Campbell obviously is an eager listener when he attends the top secret private Bilderburg meetings.

It is inevitable that employment in BC will be handicapped by this new 7% tax on BC employment, thereby lowering our overall GDP gains by a factor larger than the benefits to manufacturing gains over BC small business and employee intensive sector losses.

I think there are a number of real tragedies here.

#1) The small business sectors that rely on affordable labor were never consulted on this 7% flat tax to their employee costs... had they had a choice I'm sure small business would have given up that value gap to a raise in the minimum wage... rather than a subsidy to globalization.

#2) The BC liberals have created a new 7% disadvantage to BC labor intensive knowledged based opportunities as opposed to our neighbors in Alberta. The area of future economic growth has been cut off at the knees with this new 'service' tax. BC liberal talk of a knowledge based economy is proven to be a lie and a contradiction to their taxation policy, so when they talk about building Vancouver as a financial hub, or tech economy... always remember they created the HST flat tax on labor that is a disincentive to realizing that kind of economic growth.

#3) The BC liberals have created a further subsidy to globalization that benefits from cheep off shore labor for multinational manufacturing firms that avoid our labor, and environmental, and apparently our democratic standards... but at the end of the day gets the input credits a BC labor intensive operation does not receive.

#4) The BC liberals have not done their homework on the implications of this tax, and communicated those implications honestly with all stakeholders involved prior to making any decisions. They made political decisions based on game theory alone with their own equations factoring predominantly.

#5) The BC liberals have systematically lied to the BC voters in an election about a core issue in order to win an election based on a known fraud to achieve the ends of political power.

#6) The BC liberals have lied about their knowledge of their lie to the voters of BC since the election and the implementation of a tax they promised they would not implement only a few weeks earlier when they were accountable to an election. They have shown complete contempt for not only the working class in the province, as well as their economic well being and political rights, but the entire system in the process.

#7) The BC liberals have created a new standard of conduct that delinks an 'informed voter' from the 'democratic process' thereby enabling law-less politics in the future... as enabled by back room deal makers out of the public light working for a foreign agenda that tarnishes not only the rule of law, but more importantly the public faith in the democratic system.

#8) The BC liberals have taken $1.6 Billion in bribe money to implement a tax that violated the sovereign rights to taxation policy of the province of BC... and the BC liberals did it without following the proper political process of a full legislative debate on all relevant issues in the new taxation powers transfer.

#9) The BC liberals have used multinational business as a proxy to threaten the democratic process in BC through both their Forestry CEO threat letter to the voters at election time, as well as their attempt at a law suit to shut down the HST referendum process.

#10) The provincial ndp have sold out their right to represent labor in this province (other than the labor of big government bureaucracy) through their underhanded support of the BC liberals HST policy by not proactively taking on this issue with clear alternatives and a road map to correct the most egregious areas in this new tax that hits labor at its lowest common denominator.

Obviously its a time for new politics in BC and the old dinosaurs that will always sell us out from the extremes are nearing the end of their relevance to most working class families in this province. I think recall is a start, and the development of new political alternatives is inevitable.

Time Will Tell





I should add that I would like to see some ndp MLA's recalled as well over this HST issue starting with their leader.

Carol James is just as guilty of sophistry as any of the BC liberals are. She always tries to ride the fence and won't commit to any clear policy... and with HST she is almost as bad as the liberals were at election time on the issue.

Carol James knows the revenue made off of the backs of the working class, and especially the minimum wage sectors, could be used to shore up her core support with the public sector workers... and so the ndp will be as vague and none committal as the ndp possibly can be on the issue... and IMO BC voters shouldn't stand for a double back stabbing from the right and left... all MLA's should all be recalled I think, and a new election should be called so the voters of BC can all finally have in informed vote on the issue.