If British Columbians vote to keep the harmonized sales tax, the provincial government will drop the rate to 10 percent and send a $175 cheque to families for every child under 18 years old and to some seniors.

They'll pay for the changes by raising the corporate tax rate and postponing a planned cut in the small business tax rate, Finance Minister Kevin Falcon said in a presentation to reporters this morning.

"This became a question of fairness," said Falcon, noting that an independent panel's report on the HST found it had added a cost of $350 per family per year. "With this announcement today we're fixing that."

He described the changes as a responsible way to lower the tax burden. The cheques will bridge the transition year, he said. "For a typical family with two kids, that's $350."

The HST would be reduced to 11 percent on July 1, 2012, then to 10 percent on July 1, 2014. Each percentage drop costs the treasury roughly $850 million.

Raising the corporate tax rate and delaying the small business tax cut will make up some $650 million a year.

Businesses clearly benefit from the HST and in the public's view a rebalancing was necessary, said Falcon.

An initiative petition forced a province wide vote on whether to extinguish the HST and return to the PST and GST. Ballots are to be mailed out starting June 13 and voting will close on July 22.

The changes announced today, which Falcon said are to be introduced in the legislature this afternoon, will only be made if the vote rejects getting rid of the HST.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.