Opinion

How to Detect Budget Bamboozling

When BC's Finance Minister rolls out his numbers and claims Tuesday, keep these facts in mind.

By David Schreck, 31 Aug 2009, TheTyee.ca

Colin Hansen Presenting

Finance Minister Colin Hansen delivering February's budget.

Related

Finance Minister Colin Hansen faces a credibility problem when he presents his budget on Tuesday, September 1st. His government is already in free fall in the opinion polls as a result of last month's surprise announcement on the HST. He has to amend balanced budget legislation a second time, confessing that there will be more than two years of deficits.

Budget watchers are likely to take any forecasts offered by Hansen with a grain of salt as they watch for details on cuts. Who has the most reason to be skeptical?

Start with many arts organizations, who began getting letters last week informing them that they won't be receiving gaming grants; that comes despite an expansion of BC Lottery Corporation's Internet gambling.

Hundreds of community organizations fear that the government will wreak havoc on their financial security.

Big cuts to services directly provided by government probably won't be specified in the budget. It will be necessary to compare the estimates book tabled last February with the update tabled Tuesday to find general areas with cuts, and then wait for leaks that identify the specific program areas that are getting hammered.

Health and education will be especially tricky because government will point to absolute dollar increases without considering whether those increases are adequate to cover higher costs it imposed on health authorities and school boards through contract negotiations.

HST sales job reveals extent of poverty

If Hansen can be believed, we will all learn to love and appreciate the HST once he releases the charts and graphs that will be part of his budget presentation. In particular, Hansen promised to "set out some numbers... which will actually demonstrate that the impact on typical seniors in British Columbia will in fact be a net benefit... " Hansen may be correct, but only because many seniors in British Columbia live in dire straits.

Median family income is the level at which half of all families have lower income and half have higher income. For all families, all ages and all types, median family income in B.C. in 2006 was $62,600; for families with the oldest member being over age 65, median income was only $21,900. According to the government's HST website, "Low income families and individuals will receive an annual B.C. HST Credit of $230 for individuals with income up to $20,000 and $230 per family member for families with incomes up to $25,000, paid quarterly with the GST credit." So how many people are so poor as to qualify?

The government estimates that "over 1.1 million British Columbians" will receive that benefit, a testimony to the extent of poverty in B.C. -- one in four.

Those figures also indicate that 3.3 million British Columbians will not qualify for the tax credit, in particular, anyone working full time and making over $13 per hour, unless Hansen improves on what has been announced on his HST website.

Misleading to spin the HST

Restaurants and their employees are going to be amongst the hardest hit by the HST. Not only will food service workers suffer as consumers, but some will lose their jobs. In question period Hansen responded to concerns raised by Ian Tostenson, president of the British Columbia Restaurant and Foodservices Association, by saying: "But at the end of the day, people in British Columbia who are unemployed do not have the luxury of being able to go out and enjoy the fine restaurants that he represents."

It is true that British Columbia has many fine restaurants, but it also has hundreds of coffee shops and fast food outlets. Tostenson's organization represents that full range of food services. Hansen's remarks are misleading, and reflect his desperation. With the HST, the $7.00 special at a food court will increase to $7.49. For someone who eats like that every working day, the increased cost over a year is about $125, and that's just the increased cost of lunch, before the worker gets home to look at higher hydro, gas and telephone bills thanks to the HST.

Another misleading statement used by Hansen and other apologists for the HST is that it will help to pay for health and education. The province will receive a one-time payment of $1.6 billion from the federal government "to support the implementation" of the tax. Ontario is using the transition money to assist families. B.C. is taking it into general revenue. It could be called money for anything, but it gets misleading when Hansen goes beyond the one-time payment and suggests that the HST will help fund health and education on an ongoing basis. That is only true in the sense that the PST did the same. If the tax is truly revenue neutral it won't do anything more than what the PST did for health and education.

The PST raised $5 billion. Hansen has said that the HST will too, plus or minus $200 million. Unless they are lying or confused about the HST being a tax grab, the HST has nothing to do with short term revenue requirements; it is a tax shift from business to B.C. families. Hansen tries to make the link to health and education funding on an ongoing basis by arguing that the HST will contribute to economic growth which in turn will bring in more revenues to fund health and education. That's the same tactic he uses when he claims it will help restaurants; they'll take a hit but economic growth will make up for it.

Why HST's benefits are oversold

A problem with Hansen's hope that the economy will be stimulated as a result of the HST lies in the structure of the B.C. economy. Resources continue to play a major role and the prices they sell at are determined by international markets. With lumber, minerals and natural gas selling at prices barely a quarter of pre-downturn peaks, it will take more than an HST input tax rebate before mills open.

The Campbell government used to say that tourism would cushion the blow in resource dependent communities. That is one of the industries which will be hit hard by the HST. It is possible that economic recovery will be delayed as industries that might otherwise pick up some of the slack during especially hard times in the resource sector see their customers turn away due to higher prices and lower incomes.

On August 26th Alberta released its first quarter financial update. B.C.'s isn't due until the end of September, but Hansen may release it early as part of his budget update. Alberta is now forecasting a deficit of $6.9 billion, up from $2.2 billion forecast in its budget. Analysts point out the forecast is based on the price of natural gas increasing substantially and averaging Cdn $3.75 per gigajoule over the fiscal year although many think it could drop below $1. B.C. is not as vulnerable as Alberta to changes in natural gas prices, but even so, government revenues drop $300 million for every $1 drop in the price of natural gas.

When Alberta tabled its $2.2 billion deficit, many said it was further evidence that B.C.'s forecast of a $495 million deficit was unrealistic.

On Tuesday realism will hit home.

In July 2010 we'll see the audited financial statements that will show whether Hansen is more accurate with his post-election budget update than he was with his pre-election budget.  [Tyee]

51  Comments:

Login or register to post comments

  • Jeffrey J.

    2 years ago

    Liberal Boondoggle Legacy Continues

    An excellent critique from Prof. Shreck. And might I add, as usual. When you compare the material coming from BC's "mainstream" media (CanWestGlobal owns all the dailies; David Black the weeklies) versus the insightful, gutsy writing from the Tyee, the difference is staggering. Here we see authors who can tell the truth to power, day in and day out. Which readers have craved since the print media has failed democracy.

    In this case, the Campbell "Liberals" are mimicking the well worn path of disaster capitalism so well described by Naomi Klein (see also the Wrecking Crew by Thomas Frank). Slash government spending, shift power to corporate interests, undermine good public policy, crash the system. Over the next year or two it appears quite possible that we will see the worst possible policies put into effect when our citizens will need help the most. A more callous, vicious form of government would be hard to imagine.

    Excellent analysis.

  • crankypants

    2 years ago

    Budget 2009-Post Election

    There is no reason to believe that the budget to be unveiled on Tuesday will be any more valid than the one brought down in February. Minister Hansen should be able to give us a good idea as to where we are today, but his predictions for the future will be nothing more than a stab in the dark. Antbody that puts any credence to any government's predictions is a fool. The only valid information that will be presented will be that of the cuts to services and limitations on the spending by various ministries.

    With respect to the HST, whatever he says will just be more conjecture. He has no more idea with its impacts than you or I. There will be more general statements presented lauding its implementation that are based on nothing more than idyllic theories and wishful thinking.

    Am I a NDP supporter? The answer is no as I no longer vote for any party. I will only vote for someone who is answerable to his or her constituents, not a political party. The political party is just a dinosaur and must be eliminated so that we have a true democracy rather than an elected dictatorship. We must make those that we elect answerable to us rather than to a dictator.

  • Too true

    2 years ago

    Moral outrage vs. financial outrage

    If British Colombians had been as outraged by Campbell's homicidally deep cuts to the disabled, the sick, and the poor, upon inheriting a surplus in his first term, this systematic deconstruction and diversion of our collective wealth never would have lasted long enough to take a toll on the middle class.

    The sick, the poor, the homeless, and the disabled, are the canaries in the coal mine (especially the people who are sick, poor, homeless AND disabled). How many of them did British Colombians step over before becoming irate with this new tax grab?

    People don't have to be charitable. They don't even have to be decent; just aware. If a government is unconcerned that its policies are killing its citizens, then it is not going to feel any remorse over robbing them.

    Campbell hasn’t just crashed our economy; he’s dismantled, and redistributed our wealth. Up. Way up. It is always going to be unsustainable to steal from the poor to give to the rich. The poor run out of money. Fast. It’s mathematically impossible for any other outcome to ever occur.

    It’s no coincidence that the right wing is fighting a perpetual war against education. Not all British Colombians are oblivious, apathetic, and greedy, but the ones who are, cast the votes that condemned us all to this mess.

    Campbell sold off our assets and raided our social programs to throw a party. A really expensive Olympic party. He drained the province dry, and threw the HST at us to sustain his party budget. Beyond that, he doesn’t care. He picked the carcass clean. He has nothing left to steal, and nothing much to fear. We never seem to put politicians in jail, no matter how much they steal, or how many they kill.

    Our finances are way worse than Campbell and Hansen have admitted, and they will still by lying when Tuesday rolls around. They’ve set us back decades in terms of what our standard of living will be when the dust settles, and the damage is surveyed.

  • Fiat lux

    2 years ago

    With the whole economic

    With the whole economic system built on fraudulent theories, is it any wonder that politicians suporting and enforcing it are also lying ?

    There's no other way to keep the system running and the hope for the future directorships alive.

    Ed Deak.

  • jnewcomb

    2 years ago

    HST is tax on consumerism

    Why spend $7 on lunches when we can slap a piece of ham between bread, include an apple and it only costs $1? Thats the problem with some commentators is that they ignore the personal responsibility of those who can make sound economic decisions. Its called the 'latte' effect, and you save money by making better personal choices.

    If you want to keep social programs, you got to give money to government for that.

    Like the carbon tax, the HST may help to induce people to make changes that reduce their waste, reduce their proclivity to spend, and to live with a slightly smaller footprint on the land.

    If BC tourism depends SO much on cheap thrills, it has a big problem that the tourism promoters are just sweeping under the rug.

  • Cynic

    2 years ago

    The big bamboozle. The

    The big bamboozle. The numbers game is a charade, a con, a flimflam. There's no shortage of money. But there is a shortage of those who understand the money and banking fraud. Money reformers yearn for the day that enough of us wake up to this bogus system and send these liars packing. Looking at our world, that day can't come too soon.

  • freebear

    2 years ago

    Shim Sham Bamboozle!

    Just watch his shifty eyes when he delivers the budget and how many times he has to clear his throat!

  • morechatter

    2 years ago

    Big Big Troubles Ahead

    The much HST, the much hated tax on consumption for those who already are left the hardest hit in the province, as BC worst record of proverty for its citizen. Campbell has been bleeding the young, seniors, disablied, injured workers etc from the get go as money from ministries makes it way to general revenue. And its gonna hurt that small business owner thats for sure. How does the future look? Bleek and the tax will bleed the poor to death because Campbell's Liberals way of eliminating poverty is eliminating the poor.
    Across Canada people are trying to figure out how to get the most mileage for their buck as everyone is faced with the dilema of reducing energy costs. Not in BC, people don't stand a chance during a recession with a added carbon tax. So why would you add a tax on carbon when the economy is in a recession and consumers were already faced with tuff choices? Was Campbell helping the envirnoment or helping himself to some much needed cash.
    Is the BC economy recovering? No its just got a whole lot worst. China is in the red and that is going to hurt especially any hopes of the recession being over.
    The carbon dollars go on tax breaks and not on the environment while if Campbell was anykind of leader he would be getting companies to clean up their mess rather than clean out the public's pockets. And don't look to the cash strapped public for cash but coporations who are always trying to figure out how to get out of paying their taxes. I do believe coporations found a way, Campbell will do anything for a buck.

  • Van Isle

    2 years ago

    It won't be budget speech

    It won't be budget speech tomorrow; it'll be a con-job, a good old fashioned hucksterism, raw-raw-raw spin, by a professional liar. There are 2 sad parts about it 1) is the mass-media won't pick up on it for what it is and 2) the majority of the sheeple will get sucked into too.

  • DPL

    2 years ago

    BS, piled higher and deeper

    BS, piled higher and deeper will be the plan for the latest guess bt Hansen. That gang cares norhing about so many BC citizens that will be doing without things as the costs go up

  • morechatter

    2 years ago

    BC Citizens Left Clueless

    The much hated, HST isn't about services, its about tax breaks for the big business. Campbell cuts services in good times as its how he started out going in cutting services, closing women's centers down and its everyone to the street, to start as he leaves those in need with out the necessities of life. Are people dying in this province, especially the poor? You bet, just listen to the sirens on welfare Wednesday as its not uncommon for those who are left without hope to take the 20$ given for a food crisis for the month and check out for good. Anyone got the numbers of people who have died of drug overdoses? A great deal of it is suicide as even the young are left without any hope for the future as the sweetest little girl, with tears running down her checks looks up at me and says, "I wish I were dead, I can't take it." As she like many other children in this province are left in situations no child should be in.

    Is this tax going to make a difference to this little girl? It means nothing as Campbell strips the ministries down to a few key people without any real services as long as he could get his hands on those transfer payments that end up in general revenue.

    Who do you believe? What Hansen and Campbell have to say will be hard sell as its one of the reasons I don't associate with people who don't tell the truth because you don't know what to believe. Unfortunately Campbell's the type of guy big business can relate to low, down and dirty. Take GE for instance, company knows its product has caused serious harm to families and even death in lots of occasions but as long as their is a profit to make the product stays on the shelves.
    The war on poverty wasn't getting rid of the poor but not much chance your going to convince he Liberals any differently.

  • Chris Keam

    2 years ago

    @jnewcomb

    Someone such as myself (self-employed freelancer) will now have to charge clients 12% tax instead of 5%. How is this a tax on consumerism when it includes services as well as goods?

  • Wilfred Laurier

    2 years ago

    Some Advice

    "For someone who eats like that every working day, the increased cost over a year is about $125"

    Some advice: Don't eat out every day. Bag a lunch. If you consume, you pay.

    The left will refight the election it has lost for the umteenth time. Since none of them have voted for the government, it won't amount to a hill of beans. But will will be a form of release I suppose.

  • freebear

    2 years ago

    His budget footware should be clown shoes!

    Because its becoming a painful joke!

  • Stephanie T

    2 years ago

    Wilf, Wilf, Wilf,

    You righties have got to pull your heads out more often to avoid becoming totally brain dead due to oxygen deprivation.

    Quote:
    "Some advice: Don't eat out every day. Bag a lunch. If you consume, you pay."

    Did you forget the groceries you must buy to prepare a bag lunch (e.g.consumption) will now be taxed as well? The only way I can see for people to avoid paying more for the food they consume is to get it from the food bank.

  • Chris Keam

    2 years ago

    not true

    "If you consume, you pay."

    Not true at all. I could eat a 100 mile compliant vegan salad at a restaurant and pay the HST, or stuff my face at home with frozen french fries from Idaho and not have to pay tax at all. Which meal actually consumes more resources?

  • realisticman

    2 years ago

    Steph, Steph, Steph,

    basic groceries are zero rated and will not be taxed.

  • Wilfred Laurier

    2 years ago

    More nonsense....

    "Did you forget the groceries you must buy to prepare a bag lunch...will now be taxed as well"

    They will not be taxed. You are utterly and categorically wrong.

    Excuse me, but groceries are exempt from GST now and will be exempt from HST. The brown bag you put it in is subject to HST but it is subject to PST now.

    "I could eat a 100 mile compliant vegan salad at a restaurant and pay the HST"

    Or you could eat it at home and pay no tax.

    This is complete nonsense and misinformation and utter nonsense, much akin to complaining about tax on $40 haircuts. I get $11.00 haircuts and eat at home. Maybe that has something to do with me having some savings in the bank for a rainy day.

  • G West

    2 years ago

    The problem of course

    Is that consumption taxes punish the poor, the working poor and the middle class far more than they so the wealthy.

    Just like payroll taxes...unfortunately the businesses who will benefit from the HST by reducing their input costs are in no way 'required' to pass their savings along to consumers...

    There are, of course, a few naive individuals who might think that 'competition' will take care of the situation and 'competition' will indeed weed out many of the small business operators who do compete..it will do nothing whatever to induce the 'price setters' in every industry from increasing their profits on services and goods the 'price-takers' (average consumers) must purchase anyway.

    The HST is simply a $2 billion transfer from consumers to businesses - offset for the Campbell government by a $1.6 billion bribe to be used to compensate for their bad management over the past 8 years.

  • G West

    2 years ago

    erratum

    should be...'far more than they 'do' the wealthy'

  • Chris Keam

    2 years ago

    addressing the erroneous assumption

    ""I could eat a 100 mile compliant vegan salad at a restaurant and pay the HST"

    Or you could eat it at home and pay no tax."

    Yes, we've already figured that out. The point is consumption isn't being taxed in the way newcomb asserts.

  • Wilfred Laurier

    2 years ago

    So Garth.....

    Are you suggesting that all countries with a VAT repeal them?

  • Chris Keam

    2 years ago

    are you suggesting

    One should never eat at a restaurant or spend more than $11 on a haircut?

    Since we're trafficking in gross generalizations and all....

  • Fiat lux

    2 years ago

    Now that services will be

    Now that services will be taxed, the one thing I haven't heard about are automotive repair costs? How about them ?

    In any case businesses never had to pay the PST, because they all had tax exemption numbers and didn't pay any on goods for resale.

    In short, the alleged "savings" for businesses are just another lie.

    Ed Deak.

  • Too true

    2 years ago

    There's a giant hole in jnewcomb's bagged lunch theory.

    The question is NOT whether there is any benefit to scaling back our consumerism. The question is whether Gordon Campbell should be allowed to rob us repeatedly and relentlessly, on multiple levels. If some of the victims make the most of their misfortune, that does not turn the crime into a benevolent act.

    Campbell was, and is, a reckless promoter of consumerism. He led British Columbians to believe that the temp jobs involved in setting up for the Olympics could be counted on to last forever, and encouraged them to spend like the spree would never end.

    Besides, not everyone in BC was as reckless as the prototype you have chosen to use. Many people were barely surviving (and many were already on the wrong side of that particular tipping point). THEY can’t simply step away from the latte.

    You can’t possibly believe that Campbell is suddenly taxing all of the items that are pst-exempt (like the grocery items for your bagged lunch) in an attempt to make people more responsible. That’s ludicrous.

    While it is ‘nice’ that some people will constantly look for the upside while drowning in muck, it begs the question: If Campbell executed everyone who needed surgery, would you see it as a triumph over the wait list problem?

  • Wilfred Laurier

    2 years ago

    Correct

    "because they all had tax exemption numbers and didn't pay any on goods for resale."

    However, capital cost have PST on them. All of my tools and instruments have a PST cost which is factored into the cost of the services I supply. Now I can claim an Input Tax Credit on them.

  • G West

    2 years ago

    Capital costs such as tools, equipment, buildings & plant

    Capital costs are subject to amortization and depreciation now - the tax department calls it capital cost allowance. Such costs have always been written off against income (In the accounting trade it's called EBITDA) - that's simply another reason why the increased costs of the HST are going to impinge unfairly upon consumption and consumers - the decline in consumer spending already being a critical issue for employment - the HST input credits for business and industry are just a faster way for them to get back what they've been expensing (sometimes in a highly accelerated way) their capital outlays for decades.... elimination of PST from Capital Costs will have absolutely no effect on corporate earnings since they are already taken into the mix and have been written off ...they'll just have more input tax credits now and they'll be able to cash them in a lot sooner.

    There will be no reductions in service and merchandising costs as a result of this stupidity...it is just another example of shifting the burden for social services onto the sectors that can least afford it.

    In competitive areas of small business - heavily service oriented - the effect will simply be more bankruptcy.

  • Fiat lux

    2 years ago

    I've been in the

    I've been in the manufacturing business for 35 years and know all the tricks, gimmicks and angles. Sometimes businesses buy machinery and equipment exactly for tax writeoff purposes, where the little taxes they may have had to pay are always all tax deductible and cost nothing.

    Good many years ago a well known Vancouver big timer businessman, a very good customer of mine, came into my shop and started reminiscing about a wonderful woodworking shop he used to have, ending up with: "Too bad I had to put it into bankrupcy"

    So I asked him why he did it if he liked it so much, putting some 40 people out of work? He replied "I was making too much money and had to write something off.....ha, ha, ha, "

    Another thing is this big brouhaha about investment. All big businesses are borrowing, sometimes into the billions, because then the service charges also become tax deductible business expenses, paid for by the public.

    Most larger businesses hav experts, sometimes whole departments, dedicated to tax evasion and the breaking of contracts, as we can see when large government projects end up way above contractual estimates.

    Our resident moles can wave their crying towels as much as they like, some suckers may even believe them, but a lot of us know the truth and wouldn't give give this government the time of day.

    If they'd really cared about private enterprise, the first thing they would do is to end the price fixings by the oligopolic multinational corporate agribiz mafia in the food markets, like beef, stealing both sides blind and ruining farmers and ranchers.

    But that wouldn't be "business friendly", so they can raise prices in the stores every day.
    and report huge profits, while people are losing their lands all over BC every day, and we import foods we could easily grow and have been growing locally for a hundred years.

    Ed Deak, Big Lake.

  • Dr Alexander

    2 years ago

    After listening to the Premier on CKNW this morning....

    ... I must say that Premier Campbell's delivery was as well polished, slickly delivered, very well framed and on-message.

    Reminds me of when I crossed paths with a grifter a few years back.

  • Camero409

    2 years ago

    Smoke And Mirrors

    If you tell a lie enough times people will start to believe it. Here comes the smoke and mirrors. It will be like waking in a dog park with no pick up the poo regulations. Watch where you step and remember, "FOLLOW THE MONEY"!

  • BC Mary

    2 years ago

    Gordo the Grifter

    Dr Alexander,

    Perfect! Gordo the Grifter!

    .

  • Hermans Hermit

    2 years ago

    BC's BIG BAMBOOZLE

    The Lieberanos bring in a $495 million February budget and Vancity's chief economist, Helmut Pastrick, way back then says the deficit will be $3 billion.

    The NDP says in its platform that it will add another $3 billion to the debt, on top of the $495 million, and ignores Pastrick's numbers.

    http://thetyee.ca/News/2009/04/10/NDPPlatform/

    Carole James now says that the Lieberanos lied and that they should have listened to Pastrick's numbers and says that the Lieberanos knew that they were correct.

    Carole James also promised to continue to Axe the Carbon Tax but now supports the carbon tax after the election. Fool me once?

    Carole James now promises to Axe the HST but then says that she won't axe the HST if elected, unlike the Saskatchewan NDP in 1991 and the Manitoba NDP, which is also looking at introducing the HST. Fool me twice?

    Fraudulent BC politics at its best!

    A sucker is also born every minute and many here seem to be sucked in as well.

    Viva La BC Visionistas! A new way to govern!

  • lynn

    2 years ago

    I'll second that:

    BC Mary wrote:

    "Dr Alexander,

    Perfect! Gordo the Grifter!"

  • Cynic

    2 years ago

    pst gst hst. capital cost

    pst gst hst.

    capital cost input tax credit exempt income tax excise tax import tax export tax ad nauseum.

    Flim flam con game charade.

    There is no shortage of money.

    Where does money come from?

  • carfreed

    2 years ago

    spend

    What IS our money being spent on?
    Roads, bridges, and more and more to support the auto industry, gas and oil companies and all you people who choose to spend a great deal of your money on maintaining and driving your automobiles.
    Triple your insurance and the carbon tax and put that into transit, education, health and the arts and maybe some affordable housing projects, ecologically designed.
    I remain, carless, homeless,and get my daughter to cut my hair and I eat lots of rice and beans.

  • Dr Alexander

    2 years ago

    Ever since Gordo et. al. have been governing (squandering) BC

    I feel like I have been living inside one of Rod Filbrant's "Dry Shave" cartoons.

    What is crazy about all this is the "cult of the leader". Gordon Campbell is the Premier. He is not my or our leader. We elect our MLAs who are supposed to be responsive to us. Before becoming MLAs, these people are "successful business people", "community leaders", "social activists" and general high functioning individuals. Then, once they get elected as an MLA, overnight they become completely supplicant to the "leader" of the party. It is quite sad and annoying to see my MLA (and MP) essentially being humiliated by their respective party "Leaders". I have no respect for my MLA or MP. If you cannot represent ME, then you are a farce and you have become a slave to a perversion of democracy rather than the embodiment of it.

    It seems to have reached the point where our provincial democracy has been so perverted and for so long, that perhaps if we saw truly representative democracy in front of us, it might look as surreal as anything Rod Filbrant could ink.

    Its been that long.

  • zalm

    2 years ago

    Brilliant, GWest!

    Capital costs are subject to amortization and depreciation now - the tax department calls it capital cost allowance. Such costs have always been written off against income ... that's simply another reason why the increased costs of the HST are going to impinge unfairly upon consumption and consumers... the HST input credits for business and industry are just a faster way for them to get back what they've been expensing (sometimes in a highly accelerated way) their capital outlays for decades.... elimination of PST from Capital Costs will have absolutely no effect on corporate earnings since they are already taken into the mix and have been written off ...

    Precisely the point made to me by my brother-in-law the builder. And in his market for houses, he has no intention of passing along the tax savings to his customers as he says he takes the risk when he builds the house, and customers have firm limits on what they are going to spend anyway, whether by the bank's pre-approved mortgage, or by their own psychological barriers ("I won't pay a dime over $799,000!")

    So for the biggest, screwiest "manufacturing" industry we've got in the province, the HST will be a disincentive to most consumers, and an opportunity for profit-taking by producers, because normal market mechanisms won't work anyway.

    Gordo may be a moral abcess, but I'm really quite surprised at how many syncophants he's picked up simply by falling into the "efficiency" trap without any consideration of the social, the moral and the logical impacts of this change in policy.

  • zalm

    2 years ago

    Hilarious, Wilifred

    Are you suggesting that all countries with a VAT repeal them?

    After all your comments excoriating high-tax regimes like Europe for their wastefulness and disincentives to bright little capitalists like yourself, you now see fit to use them as your good example?

    Hilarious! And very very sad, to see how morally bankrupt you can be.

  • zalm

    2 years ago

    jnewcomb, realisticman, et al

    Support the tax on "efficiency" grounds all you like but remember whose company you're in when you do.

    "The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing."
    - Jean Colbert, Finance Minister to Louis XIV

    Under Colbert's watch, the rich, already paying little or no tax, continued to pay little or no tax, and businesses deemed necessary to the health of the French state, such as cloth-weaving, were protected with trade barriers.

    The parallels are eerie, aren't they?

    (Don't draw the parallels too far, though - Colbert was a bit of s socialist in some ways, and that won't go ever well with some of you lot.)

  • Jeffrey J.

    2 years ago

    General Strike?

    Most social change comes from a group of people exerting the power that has always resided in the majority of citizens. History repeatedly proves that economic and political elites become obsessed with increasing power, causing more and more harm to the majority, which then results in social conflict and change.

    Democracy was designed to avoid such a difficult process, but most of North America's governments and elites have lost interest (and comprehension) in democracy.

    A general strike is a long standing, successful non-violent, civilized method (perfected in the 1930's) of ensuring policies are changed for the benefit of the majority.

  • mary jane

    2 years ago

    what we need now

    It would help us to find the real cost of hst if we had a real list of what was being taxed

  • Skywalker

    2 years ago

    How to detect budget bamboozling?

    Easy. If Hansen's lips are moving, a bamboozling has begun.

  • Grania

    2 years ago

    Budget

    I expect Campbell and his MLA's to roll back all the raises in pay they have given to themselves over the past four years. I can look at HST, and this budget, with a less jaundiced eye only after that is done....until then, as a resident of BC; I feel I have been raped.

  • aw50

    2 years ago

    HST misinformation

    There is a lot of misinformation out there right now about the proposed HST, I would suggest checking out http://www.gov.bc.ca/hst/ and reading some of it. Some of the comments are out and out BS - for example, it is stated that currently businesses are paying PST on everything - this is obviously untrue - manufacturers are currently exempt from PST on raw materials, as well as goods purchased to use in the manufacturing process. Retailers are also currently exempt from PST on goods purchased for resale. These facts can be verified by checking the bulletins at http://www.fin.gov.bc.ca/rev.htm, specifically SST 054 for manufacturers.

    Then read the fine print regarding the HST and the input tax credits. The proposal is that any business with taxable sales (this is the gross value) of more than $10 million, will not qualify to use the PST portion of the HST as an input tax credit. This will result in every business with gross taxable sales of more than $10 million experiencing a 7% increase in costs overnight.

    Don't believe anyone who tells you they are giving businesses any break here - anyone who does any business transactions at all will be affected by this HST and not in any positive way.

  • onthebay

    2 years ago

    HST blues

    mary jane

    You can bet the government won't compile a succinct list of consumable items that will go from being PST exempt to being charged HST.

    I did some scouting around last week - there's a list of current Drugstore and Grocery Store PST exempt items on the Ministry website - just search Bulletin SST 026. There's about 9 pages of items -if any of them have GST, which I suspect many (if not most) do, they will have HST.

    If you find a good list somewhere let us know!

    aw50

    Wow! What proportion of BC businesses BC might have taxable sales of more than 10 million?

  • mary jane

    2 years ago

    To To True and your

    Moral outrage vs. financial outrage

    Myself and others who are aware and know gordo has caused much suffering for the poor and disabled. Do you have any idea of the numbers who have died as a result of being homeless or an inablity of a sick person to get what they needed to save their lives?

    Why should gordo get to much to eat who\ile kids go hungry??

    WE who are sadly aware of the cruelty that has gone largely unnoticed in BC could have warned others. Although many people don't want to know how much others are suffering.

    If mainstream media was free to report more if might have helped but but humm

    Thanks for the list it helps. Not all of us can cruise the net so easily.

  • RickW

    2 years ago

    Colin Hansen Keeps Saying.....

    ....he had absolutely no inkling whatsoever that things would be so bad -- even though any number of other prominent personages did.

    Have the Libs seized upon yet another way to pilfer the treasury, even though they've all ready reached the bottom of the barrel?

    Of course, what's the use of compleining about such things -- especially as it's only months into a 4 year dictatorship.

    Thank you BC voters (with special thanks to the no-voters)!

  • hypercaffeinated

    2 years ago

    Misleading comment

    "The government estimates that "over 1.1 million British Columbians" will receive that benefit, a testimony to the extent of poverty in B.C. -- one in four."
    Except that many are teenagers living at home or spouses providing a second income for the family. Exactly how many, I don't know, but certainly the number in poverty is well below what you're suggesting.

  • jhudgina

    2 years ago

    Favourites coming and going

    All health, education, arts, even libraries have been cut but I haven't heard that subsidies to (wealthy) mining companies have been withdrawn, or funds for the Olympics have been cut or the walkway on Robson has been shelved. How did everything in this province get so far out of focus, the corporate government serving its own purposes of spoon feeding business regardless of the cost to citizens and the poorest of the poor the numbers of which increase each year. Why do we allow it to happen to us?

  • G West

    2 years ago

    Nope

    In order to get the benefit the recipients have to file a tax return...the suggestion that people with such low incomes are not poor is absurd.

    If any of the potential recipients are married and earning a second income their salaries are considered as such and there can only be one GST/HST refund per family unit - the calculation is based upon grossed up family income minus tax credits - if it reaches the threshold level the refund in less or, once a ceiling is reached, non existent.

    The figures for poverty in the province are quite likely conservative.

    Sadly the refunds will do nothing to alleviate the problem

  • egodley

    2 years ago

    What about bikes?

    Any idea if bicycles and bike services will be HST-exempt?

    • The discussion for this story is closed. No more comments can be added.