The court of public opinion may force the outright rejection of the Harmonized Sales Tax (HST) in B.C. this June, but the Business Council of B.C. hopes the facts will sway some to come on-side.
Jock Finlayson, executive vice-president of policy for the BCBC, says the proof will come after next month’s planned referendum on the tax.
Speaking to the Parksville and Qualicum Beach joint chambers of commerce gathering on Thurs., May 12, Finlayson said recent poling done by his organization still shows a lot of anger over the HST — yet support is growing.
“People don’t like tax,” he said, adding he doesn’t think the province will be able to retain the HST after the referendum.
“But we’re doing what we can do to get the information out there and try to reach the undecideds.”
Finlayson has a background in economics and made the facts of the HST clear and understandable to gathered chamber members.
“Canadians do pay a lot of tax,” he continued. “I think a lot of people feel that way … so I can understand the reaction many people have had to the HST.”
He pointed out the referendum — a mail-in vote set for Fri., June 24 — is not going to ask if residents want lower taxes. Nor will it ask if B.C. should have a sales or consumption tax. It’s simply a question of keeping the HST, or going back to the GST/PST tax model.
The HST, he explained, is essentially a tax on consumption — goods and services are taxed in a single structure. This allows business owners to only have to calculate tax at one level, instead of two. This saves time and money, which will be passed on to the consumer.
“Consumers will pay more tax,” he said, “especially households with above-average income.”
He claimed poor households will not face the same impact, thanks to HST tax credits.
The key in Finlayson’s presentation was that the benefits of the HST will be only seen over time.
If the HST is retained, Finlayson said B.C. will see economic benefits out of a tax system that is common elsewhere in Canada and the world. Those include:
• reduced productions costs in a drop in tax at that level.
• lower tax administration costs.
• a spark in investment and job creation over time.
• improved competitive position.
These benefits, he said, should improve the lot of most B.C. businesses. He admitted, however, some will not se as big a boon — especially those in the restaurant and tourism industries.
“The HST is not perfect,” said Finlayson, “but it’s well-aligned to shore up weak areas, such as production levels, research and investment.”
Any benefit to consumers, he added, will happen over time.
Getting the time to see if that pans out is another question.
With a June 24 referendum yet to come (see information box at the end of this article), Finlayson admits no economic study can predict what will happen.
All he can do, he said, is get the facts out there and let people make up their own minds — as long as their anger over how the HST was introduced has abated.
Finlayson’s report on the HST, along with graphs and charts on the tax’s benefits to B.C., can be found online at www.bcbc.com.
editor@pqbnews.com
