Premier Christy Clark insists she’ll fight to “minimize” the money the province would owe Ottawa if voters defeat the HST in an upcoming mail-in referendum.JOHN LEHMANN/The Globe and Mail
British Columbians, as the HST referendum draws near, have cause to be grateful to the independent (though government-appointed) panel. The four panelists have set out clearly, but not simplistically, the factors that the voters need to think about. Premier Christy Clark evidently thinks their measured approach is not enough to rescue the HST, and is looking for enticing concessions, such as giving up a whole percentage point of the 12-per-cent tax.
The report of the foursome - who include a former Conservative treasurer of Alberta, Jim Dinning, and a former Saskatchewan NDP MLA, John Richards - says that the HST has not turned out to be quite as tax-neutral or as revenue-neutral as its most vehement advocates had predicted. The average family is likely to pay $350 a year more for a few years in sales tax, the panelists say.
Nonetheless, they conclude that the HST will increase economic growth more than enough to outweigh those disadvantages, but they frankly recognize that they cannot say with certainty how large those gains will be, or quite how long it will take to achieve them. But one of their most vigorous statements is "Virtually all economic analysis finds the HST increases economic growth, productivity, wages and the quality of jobs."
The fact that so far the HST has turned out not to be revenue-neutral is a double-edged sword. More revenue means more money to provide public services and to reduce the deficit; in that sense, the reformed sales tax has been more productive than expected.
The report may not be a gripping read, but public-spirited citizens of B.C. will consider it before they mail in their ballots in the referendum of June 24 - and most of the fair-minded ones will, and should, vote to keep the HST - even without a salvage operation consisting of major exemptions or a rate reduction, which could severely delay the repair of B.C.'s public finance, and lead to a disproportionate reliance on income tax.