An independent panel looking into the impact of the HST has concluded that, yes, the HST is costing average people a substantial amount of money and, no, it is not revenue neutral.
The panel was commissioned to debunk some of the myths and political spin around the tax, in preparation for the upcoming referendum. It has done its best to give accurate numbers about the impact of the tax on individuals and businesses, and about job creation and lower prices for consumers.
The panel concluded that the HST is costing average family an extra $350 a year, with a small portion of that offset by lower income tax rates. Most people do not get the HST rebate, but for those who do, the impact is substantially less.
The panel also concluded that the number of jobs which will be created by B.C. having a value-added tax will likely be nowhere near as high as the BC Liberal government has claimed. It estimates that 24,000 jobs will be created over the next 10 years, about 20 per cent of the 113,000 figure cited by government.
The panel said the tax is good for businesses, who will pay $730 million less annually. Consumers, however, will pay a net $1.33 billion more, and that includes other tax breaks (such as income tax) and HST rebates. Very clearly, this is a major tax shift.
The panel said that the restaurant industry has not been too badly hurt by the tax, citing Statistics Canada information. The industry disputes this. In its own survey of members, the Canadian Restaurant and Foodservices association says sales have dropped 15 per cent since July, when the HST was introduced. The association acknowledges that the imposition of tougher drinking and driving laws has also been a big factor, as alcohol sales have dropped by more than 20 per cent since new rules came in.
As people consider how to vote in the HST referendum, the information the panel presents (accessible at www.hstinbc.ca) is very helpful in putting the whole issue into context. However, unless the government offers some substantial breaks for average families, the tax appears to be doomed.
