Weird and Wacky HST Debate in BC's Legislature
Trying to make sense of the Liberals' defence is no easy task.
Premier Campbell, Finance Minister Hansen rolling out the HST.
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In Defence of the HST
This is good tax policy for consumers, say two UBC economists, and I agree.
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What the HST Pulls from Your Pocket
From phone bills to funerals, hits you'll take from the Harmonized Sales Tax.
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Layton and Donnelly Woo the HST Haters
New Dems' by-election strategy is to pin the much maligned tax on Harper.
The Gord giveth and the Gord taketh away. In the legislature Wednesday, the Premier stated: "Let me reiterate that during the election campaign we had no intention of dealing with the HST... There's no question that the HST is going to strengthen our economy. One of the things that we were clear about during the campaign is that we had every intention to strengthen our economy as it came out of this economic downturn."
In case you missed it, you were supposed to read Gordon Campbell's mind and understand that when he said he would "strengthen our economy" he meant that he would introduce the HST even though he said he wouldn't do that.
It is much easier to read Hansard, the record of legislative debates, than it is to have actually watched the debate between Campbell and James and between NDP Finance critic Bruce Ralston and Finance Minster Colin Hansen. In real time you could run a stop watch, as I sometimes did, and see a four or five minute wait between the time a question was asked and an answer was given. It is customary in the B.C. legislature for ministers to consult their officials before responding during "estimates debate." But on Wednesday, as they debated over the difference between what was said before and after the election, the silences were precedent-setting.
What was at issue? Before the election the Liberals said the maximum deficit was $495 million, after it became a a $2.5 billion deficit. Before, there was no HST, after, there is an HST.
Ralston vs. Hansen
The HST debate between Ralston and Hansen was interesting because Ralston showed all his skills as a lawyer interrogating a witness, while Hansen showed all his skills as a politician in evading an answer. In "Committee A" on the afternoon of Nov. 23, Ralston said:
"I'm taking it that, of the $5 billion in PST that's presently paid, $1.9 billion of that will no longer be paid by business, leaving approximately $3 billion based on the current PST tax base."
"It looks like there's an additional $3.5 billion required to get up to the number that's referred to in table three from the HST. You started with the provincial PST. You take the $1.9 billion to business out of that. That's what you're left with. You have to raise $3.5 billion more. Where does that come from?"
Ralston spent over an hour exploring that question from different perspectives and at no point did Hansen provide a direct answer; however, in reference to the $1.9 billion Hansen said:
"The same taxpayer that pays the $1.9 billion today is ultimately going to be paying under the HST system, and that is the consumer. The $1.9 billion that gets charged in PST throughout the value chain gets built into the costs of goods and services."
"While it may not be apparent to the consumer as to how much PST is embedded in the retail price of goods and services that they are buying, that is in fact part of the ultimate selling price of those goods and services. So those costs come out, and as I said before, all other things being equal, goods that are currently subject to PST in British Columbia will be less expensive in the future than they otherwise would be. Some goods -- goods currently subject to PST today -- even with the HST applied to them will, in fact, be less than they otherwise would be two years from today."
"Then there are other goods which are not currently subject to PST today but only GST that will, in fact, be slightly more expensive to consumers at the end of the day."
"The bottom line is there's a broader tax base, but it is the consumer that pays the price of PST today, and it is the consumer that will continue to pay under the harmonized sales tax system."
In other words, Hansen admitted that the corporate savings will be passed on to consumers, but he argued that they pay the tax now though higher prices which he believes will be reduced with the HST. The problem with that argument is that Hansen and Campbell argue that the primary beneficiaries of the HST will be forestry, mining and construction; most B.C. families don't buy a lot from those industries, so they can't benefit from any prices changes in those industries.
James vs. Campbell
On Nov. 25, when it came Carole James' turn to debate Premier Campbell on the HST, the committee chair tried to interfere in the debate with advice that the matter had been canvassed in the finance minister's estimates. Occasionally Campbell used that cloak, but he couldn't help himself from saying that the HST "is the single most important thing that we have been informed by leading economists across the country that we can do to strengthen the economy, to strengthen investment, to encourage job creation, to make us more productive and more competitive."
Isn't it surprising that Campbell didn't say that before the election, just to make his promises to strengthen the economy perfectly clear?
Imagine what the election outcome might have been if instead of those warm chats showing the premier offering deep concern, the ads instead said: "Vote Campbell if you want the HST"!
Is it true that implementing the HST is the most important thing that can be done to strengthen B.C.'s economy? It is clear that implementing the HST will hurt restaurants (France lowered its tax on restaurants last July to stimulate growth), tourism and new home development. When asked for studies made prior to the decision to implement the HST, Campbell referred to lobbying done by industries that might benefit from the tax shift, but he refused to provide any studies on the impact on other industries.
Campbell did quote his finance minister as saying: "The more that we can do to stimulate the economy, create jobs, make sure people are working, it will provide more disposable income that people can use for the occasional restaurant meal out." The HST doesn't just apply to "the occasional restaurant meal out"; it applies to working people's daily lunch, to coffee shops, to food fairs and to greasy-spoons. It is an insult to British Columbians when the premier and his minister hide from the truth.
Oily facts, slippery logic
It is difficult, if not impossible, to find economic studies that support, or refute, Campbell's claim about the HST (and other value added taxes (VATs)). In Canada, New Brunswick, Newfoundland and Labrador and Nova Scotia adopted the HST in 1997, but Newfoundland and Labrador and Nova Scotia subsequently benefited from significant offshore oil and gas development. It would be foolish to attribute their economic status to sales tax harmonization rather than oil and gas riches. So how does economic growth in New Brunswick since 1997 compare to British Columbia's?
Between 1997 and 2008, New Brunswick led B.C. in economic growth in 1998, 1999, 2001, and 2003; four out of 11 years. What about Newfoundland and Labrador and Nova Scotia? Between 1997 and 2008, Newfoundland and Labrador led B.C. in all years except 2004. Between 1997 and 2008, Nova Scotia led B.C. in 1998, 1999, 2001, 2002, 2003 and 2008 -- six of 11 years.
It appears that oil riches have much more to do with economic growth than does harmonization of the sales tax, but that won't stop Gordon Campbell from handing $1.9 billion per year in tax benefits to the financial backers of his party at a cost to B.C. families. When asked for evidence, Campbell simply says the HST will produce growth and any proof of that is a cabinet confidentiality. ![[Tyee]](http://thetyee.cachefly.net/ui/img/ico_fishie.png){kind=small}
Luke
26-11-2009
Prolly a Mute Point Anyway...
CTV News is reporting that Harper will be introducing the federal HST enabling legislation within a few weeks. And if that legislation fails to pass then BC and Ontario will not be able to pass their own HST legislation.
And the CPC stated that if the legislation is not passed then that's the end of the HST provincially.
Defeating the federal legislation will also not defeat the federal government as it will not be a confidence vote.
Let's see... the federal NDP will vote against the legislation and so will the BQ and that leaves the federal Liberals.
Considering their plunge in the polls, that Ontario and BC also represent a big haul of federal seats, the federal Liberals quiet backing away from the HST in the media recently, and Peter Donolo's new presence I suspect that the Liberals will also vote down the HST for their own political purposes... just like the NDP and the BQ.
It all happens within the next few weeks so grab your bag of popcorn folks and watch this soap opera unfold.
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20091126/HST_Ottawa_091126/20091126?hub=TopStoriesV2
salty dog
26-11-2009
Gordon Campbell`s hst gamble comes up snake eyes
The HST will fail....Tim Hudak and the provincial Ontario conservatives have pulled ahead of mcGuinty in the latest poll.
http://powellriverpersuader.blogspot.com/2009/11/gordon-campbells-hst-gamble-comes-up.html
Cheers
Barryeng
27-11-2009
Decent News?
Thank you Luke. This is the first decent political news I've heard in a very long time. I realize that so far it is just speculation, but By God I hope that you are right.
Camero409
27-11-2009
Gordo and Hanson - Big Business Toadies
Its apparent to anyone who has children that when a child evades a question there is something to hide. Children have a hard time lying so will evade a answer to a directly asked question. It is also apparent that Hanson and Gordo are evading the questions and as a result are acting just like children.
The question all LIbERalS supporters must ask themselves, "did we elect a bunch of kids?". Everyone else knows that this government is acting like a bunch of kids being led around by their Corporate parents.
Gordo and Hanson I challenge you to "man up" and answer the questions directly with the truth. I know, I know, it's like asking Harper to attend a Climate Change conference!
Skywalker
27-11-2009
Hansen doesn't even want to tell the truth
He knows who will pay the extra and he knows it won't be his business friends. He can't bring himself to say which sector is left to pick up the tab once more. So tighten the belts on your life jackets folks on this ship we are piloted by a bunch of pirates.
ReeferMadness
27-11-2009
Isn't politics dysfunctional in BC
Politics is completely dysfunctional in this province. Why is that? Well, it's because when you have a majority government, it's a license to do whatever the hell you want for 4 years. And people don't pay attention so you can effectively lie through omission when it comes to being elected?
Does it need to be like this? Well, we had a chance to change it by implementing PR. In that case there would be coalition governments starting in 2013 and politicians wouldn't be quite so free to do what they wanted.
Why didn't we get PR? There were a lot of reasons but one of the big ones was a thoroughly dishonest campaign run by No STV who put out distortions and misinformation about the PR system overwhelmingly recommended by the citizens assembly.
Who did that? Well, the primary people behind No STV were Bill Tieleman and David Schreck.
And now one of them is here complaining about the effects of the system he helped perpetuate. And in all likelihood when my kids are voting, they'll still be subject to this screwed up system. If they bother to vote.
Thanks, Dave.
realisticman
27-11-2009
HST's a go
Last updated on Friday, Nov. 27, 2009 1:28PM EST
The Bloc Québécois says it will “probably” support a Conservative motion next week on the harmonized sales tax, a move that would give the government the votes it needs to move ahead with the plan. "
Skywalker
27-11-2009
Reefermadness
The issue here is the honesty of the Liberal Government. It has nothing to do with STV or who opposed it. You have been flogging that dead horse too long for anyone to take the comment seriously. Bill Tielmann and David Schreck are right on HST and would be even if we had STV. This is not a complaint about "the effects of the system". It is about politicians blatantly lying to the public; something STV is no safeguard against. It is silly to even think it would be. Move on!
morechatter
27-11-2009
Haper's Sales Tax
Iggy says "Let no man take apart what two politicians scheme up together" and it cost the party in the poles as Canadians could see little difference in the parties. Are the Federal Liberals for the tax that leaves Canadians with less in their pockets as the check out counter and could cost them their jobs? While services and users fees continue to rise and the cost of owing real estates takes 75% of your income in BC which also gets passed onto the consumer.
salty dog
27-11-2009
HST is dead Rman......
Iggy ain`t no fool.....He knows his party would be toast if he supports the tax......
And Rman....Who you trying to fool...If you had anything you would provide a link..LOL
Quebec..The Bloc...is voting the HST down because they want 2.6 billion in transition money for adopting the HST...They weren`t paid nothing.
Campbell can squirm...Hansen can sweat.Campbell can threaten...Scary...oooh oooh
HST is dead...period!
Wilfride Laurier
27-11-2009
Maybe the HST will "fail"
But it won't fail to be enacted. If voters want to protest, they will have their chance to voice their discontent in 2013. That's democracy and how it works. The the NDP, 100% assured of forming the next government, can repeal it.
"HST is dead...period!"
I will quote you on that Quarry, just like the last election was "in the bag" for the NDP because you had "seen the internal polls."
Luke
27-11-2009
Looks Like the HST Is Now A Done Deal - The BQ Supports HST!...
http://www.theglobeandmail.com/news/politics/bloc-likely-to-support-federal-hst-bill/article1380336/
So the NDP votes against the HST legislation as well as many Liberal MP's and perhaps a smattering of BC Con MP's.
It doesn't matter. The Cons and the BQ have a combined vote of 193 votes when only a 154 majority is required.
The BQ supports the HST legislation so that Quebec can also receive their HST bribe. Go figure.
Even New Democrat deputy leader Thomas Mulcair is supporting the Quebec HST bribe in the House of Commons. The only way that will happen is for BC and Quebec to receive their HST bribe.
Unfortunately, game over.
Luke
27-11-2009
Some More BQ HST Confirmation...
http://www.bloomberg.com/apps/news?pid=20601082&sid=aqpbCd3BbXBM
realisticman
27-11-2009
Sitting on a dock of another bay
http://www.bloomberg.com/apps/news?pid=20601082&sid=aqpbCd3BbXBM
Did someone say slam dunk?
ReeferMadness
27-11-2009
Skywalker
You and I can agree that there is a serious issue with honesty. There are an awful lot of people on the "left" who whine and snivel about what the Liberals do with their power. Yet just a few months ago, the political establishment closed ranks to keep the system that allows them to have all the power. That doesn't seem very honest to me.
People who've lived in this province will recall the NDP had their own "honesty" issues. And they may also recall that Tieleman and Schreck were part of those NDP adminstrations.
So, we can merrily bumble along and pretend that things will be better if only we change the players. Or we can get serious and change the system.
salty dog
27-11-2009
LOL..Ha HA...
OOh Pieere...."The law may make it easier for Quebec to receive the 2.6 billion in compensation"
To which the prime minister must (first) agree to give Quebec 2.6 billion dollars...It`s a muggs game.
Good luck friends...To be saved by the Bloc...Yea,their trustworthy....The Bloc knows,unless Harper agrees "Before" the vote to give Quebec 2.6 billion in funding...They will never receive it!
And even then politicos.....If Harper promises,gives Quebec 2.6 $ billion dollars he will have permantely thrown away his chance at a majority!The Canadian public will view that bribe of our tax dollars as a federal bribe to screw Ontario and BC.And considering Quebec has had the HST since 1991...It won`t go over well among Conservative voters.
You people really need to think outside of the box...In actuality, Stephen Harper needs the HST to fail.
What part of 76% of Ontarians opposed and 80% of BCers opposed to the HST don`t you understand!
Good luck with that Bloc thing though...Ha Ha
Cheers
salty dog
27-11-2009
And here is what Harper said about the HST in Vancouver..oct 13
You can read it here...
http://powellriverpersuader.blogspot.com/2009/10/quebec-wants-26-billion-for.html
October 13/2009...Stephen Harper was at the port of Vancouver..and reporters asked Stephen Harper why he was pushing the HST...to which Stephen Harper responded...
"The Federal government isn`t pushing the HST,it is completely a provincial decision"
You can read that near the end of the link above...
But...in a nutshell...If Harper agrees to give Quebec 2.6$ billion..for adopting the HST in 1991....It will throw his statement out the window..and his majority...
A smart Harper will make the HST fail...Hope the federal Liberals fall off a cliff...Get his majority and THEN BRING IN THE HST...
Cheers
morechatter
27-11-2009
Yes, No or Maybe So
http://news.ca.msn.com/top-stories/cbc-article.aspx?cp-documentid=22739163
http://www.theglobeandmail.com/news/politics/tories-will-challenge-ignatieff-on-hst/article1379397/
RickW
27-11-2009
With only a few name changes to protect the complicit.....
.....the entire "debate" in the legislature could easily have been the one over the adoption of the GST, in place of the Manufacturers' Sales Tax.
It too was going to boost the economy -- but about the only thing it did do was enable Cretien to nearly obliterate the Conservatives.
Skywalker
27-11-2009
Reefermadness
You write," the NDP had their own "honesty" issues." Now that is a generalization that demands some proof. You got any like what specific issues or are we still flogging myths perpetuated by the Canwest Media?
Secondly to imply without proof that everyone connected with the NDP therefore also has honesty issues is a bit far fetched.
Now please don't give me "budget" as that went to court and was thrown out in court. Don't give me casinos as that was also thrown out. That leaves bingo's and only a few were even involved as it happened 13 years before the NDP came to power. No, you got to come up with something real and then we'll see.
Still STV has nothing to do with anything.
Dan the socialist
27-11-2009
One bitter Canadian
I was hoping to see what the libs would of really done, but with BQ support now that gives the libs an 'out'. I think now they will vote differently than if the BQ was not backing Harper on this.
I swore i have heard Chairman Harper say no new taxes...
Campbell should change the name of his party back to the Social Credit or just Conservatives, they are not real liberals and never were. Campbell is further right than all the PC Premiers in Canada.
Oh well, people don't care, the HST anger is hard to find these days, it seemed to of faded away. It really is pretty bad that people keep letting politicians walk all over them time and time again. The hst is basically a tax break for business and the people pay.
No matter what in this country big business always wins and the people just bend over and take it. Is it something like the Stockholm Syndrome? Like why don't we protest like they do in Europe? I really just do not get it why people don't seem to care?? They bitch for a day or two and then it is all but forgotten it seems.. anyone know why? Is there something in the water that keeps us docile?