Extinguish the HST? A summary of silliness.

For those of you who don’t have the pleasure of living in British Columbia, Canada’s most western province, I thought I’d share with you our current (and slightly stale) obsession: the Harmonized Sales Tax.

To briefly recap, BC elected the BC liberal party (as opposed to it’s only viable alternative, the BC New Democratic Party) back into power in 2009.  Both the liberals and the NDP have terrible histories of scandals, abuse of power and other skulduggery, most of which just makes BC citizens somewhat cynical about the whole political system. However, during the election, absolutely nothing was said about changing the (at the time) current tax system – a 7% provincial sales tax on top of a 5% federal goods and services tax, which many people think should have been a major debate for the election campaign.  (Opinions differ as to whether it had even been considered at the time.)

Lo and behold, one of the first things the re-elected liberal government did was sign an agreement with the Federal government (which was busy trying to re-brand itself as the Harper government, despite the fact that our political system doesn’t work that way, and that it’s illegal to boot) in order to merge the provincial and federal taxes (the PST and the GST) into the harmonized sales tax (HST).

In reality, it’s not a bad thing, since both levels of government were collecting nearly identical taxes in parallel.   If that’s all that had been in the agreement, it might have been a reasonable argument, but to muddy the water and spark off conspiracy theories, the Federal government bundled in a big payment to the province to bail it out from some other debts, incurred by recession induced budget shortfalls.

Unfortunately, at this point, a former premier (the equivalent to a state governor) decided he’d been out of the limelight for too long and decided to make a name for himself crusading against the tax.  (He’s a former NDP, of course, and the liberals were the ones who modified the tax system so it was only natural that this would be a great crusade for him to try to bring down the liberals.)  Indeed, he created enough of a protest that the elected premier resigned and the Liberals had to elect a new premier. (We don’t directly elect the head of our governments at any level in canada.)  The NDP, crushed by their loss, despite the unpopularity of the premier in some circles, also elected a new leader, just to wipe the slate clean for both parties.

The incoming premier, and our now current premier, was in power when a report came out saying that the tax exemptions don’t quite match up between the previous PST + GST and the HST.  That is to say, the government actually was taxing people more by harmonizing the two taxes and using the federal list of what is taxable and what isn’t.  This was more fuel for the fire, as people started getting quite upset over a number of items that were previously exempt at the provincial level.  Thus, previously, people were paying 5% tax on things before and suddenly found themselves paying 12% tax on the same items under the HST.

Despite the propaganda, the list of items for which the tax actually increased isn’t that onerous – and does have measures to protect the poor, although some people continue to claim that the poor are the ones paying the most tax.

So, between the ex-premier running around making statements that the HST is undemocratic and doing some serious rabble-rousing, and people being upset that they’ll pay more (anywhere between $350-1200 per year, depending on who’s actually telling the truth), the current government felt enough pressure to agree to reduce the HST to 10% from 12% AND to hold a referendum on the tax itself.

So, here I sit, with a referendum ballot on my desk, choosing between the Anti-HST side [Warning, following that link will expose you irrational arguments], claiming that a tax is undemocratic, and the pro-HST side that now thinks it’ll be able to operate with the equivalent of a ~20% cut to revenue. Neither one is looking too smart going into this battle.

Furthermore, the referendum, being conducted by mail, comes with the following instructions:

  1. Mark an X or Checkmark in ONE of the two circles next to the question
  2. Remove the ballot allong the dotted line
  3. Put the ballot in the Secrecy Envelope (A), close and seal the envelope
  4. Put the Secrecy Envelope (A) in the Certification Envelope (B), close and seal the envelope
  5. Complete the [form on the] Certification Envelope (B) […]
  6. Put the Certification Envelope (B) in the yellow ballot package envelope (C), seal the envelope
  7. Put the yellow ballot package envelope in the mail […]

The ratio of envelope to ballot is obscene (BC probably lost a forest for this ballot) and, in case you didn’t notice, step 6 forgets to tell you to close the envelope before you seal it. Oops.

So, in the end, I’ve cast my vote and checked off the No to “extinguishing the HST“, and see if the government can operate with a 10% HST, instead of going back to a system in which taxes are collected twice on the same items.  We might all be poor in the future, but we will at least be a little more efficient.

British Columbia, you may be the best place on earth ™ but this whole affair is insane.