British Columbia Finance Minister Kevin Falcon responds to the results of the HST referendum at the B.C. Legislature in Victoria, B.C., on Friday, Aug. 26, 2011. British Columbians have voted 54.73 percent in favour of abolishing the Harmonized Sales Tax and returning to the PST and GST.
It took less than a year to bring the HST in. It'll take a year and a half to phase it out – and it's safe to suggest Tuesday's B.C. budget won't be hurt by the delay.
Finance Minister Kevin Falcon recently announced that April 1, 2013, would be the day the province returns to the provincial sales tax system. Mr. Falcon made the announcement the same day he unveiled transitional plans for new-home buyers and builders.
British Columbians voted last August to scrap the harmonized sales tax, which blended the five-per-cent federal goods and services tax with the seven-per-cent provincial sales tax. The 12-per-cent HST was imposed on dozens of items not previously subject to the PST.
Mr. Falcon has repeatedly said returning to the PST would be a complicated process, and the Liberal government would do so as quickly and responsibly as possible.
This year's budget is expected to be in the red, though Mr. Falcon has already ruled out tax hikes and cuts to health and education. The delay in abolishing the HST hasn't stopped some from suggesting the government is dragging its heels to get as close to balancing the books as it can.
"I'm not quite sure why the delay," said NDP finance critic Bruce Ralston.
"I'm not sure that ... the extra revenue they're going to get by sticking with the HST is really worth the delay in terms of its impact on the economy. Clearly, they've made that decision."
Impact on the economy is the reason why the government on Friday introduced the housing transition measures. Industry experts had warned consumers were holding off on purchases until the HST was wiped out. The province announced it would raise the HST rebate threshold, among other things.
The province's push to help one sector affected by the HST left the NDP questioning why others – such as the restaurant industry – weren't afforded the same assistance.
Ian Tostenson, president of the British Columbia Restaurant and Foodservices Association, said he wasn't bothered by the housing announcement. After all, it's not as though people were holding off on restaurant purchases like they were with new condos.
Mr. Tostenson said he certainly wouldn't begrudge the province for taking its time returning to the PST.
"I know if I was government I'd drag my feet," he said. "There's a need for provincial revenue and that's bringing it in."