HST rejected by B.C. voters: North Shore update

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The B.C. government is getting to work dismantling the harmonized sales tax, a job that may take more than a year and add billions to the province's deficit.

The HST was rejected by 54.73 per cent of eligible voters, Elections BC reported. The government has promised to abide by a simple majority of voters.

Voting by constituency shows a split mainly along party lines. The strongest vote against the HST was more than 75 per cent in the NDP-held Surrey-Green Timbers and more than 72 per cent in Surrey-Newton and Vancouver-Kingsway, the home constituency of NDP leader Adrian Dix.

A narrow majority of voters supported the tax in Abbotsford, Fort Langley-Aldergrove, Oak Bay-Gordon Head, Westside-Kelowna and other seats held by the B.C. Liberals. The strongest support for the HST was 62 per cent in Vancouver-Quilchena, the seat held by Colin Hansen, the former finance minister who introduced the tax in 2009 and more than 64 per cent in West Vancouver-Capilano, held by Liberal Ralph Sultan.

In the North Vancouver-Seymour riding over 60 per cent voted to keep the tax, while voters in North Vancouver-Lonsdale voted close to 62 per cent voted against extinguishing the tax.

Newly-minted North Vancouver-Lonsdale NDP candidate Craig Keating told The Outlook he is happy with the referendum's results.

"I think the government of B.C. has reaped what it has sown. It brought the tax in in a highly deceptive and undemocratic way without public discussion and without a high degree of honesty, and I think the people of B.C. have pretty conclusively spoken that that is not how tax policy should be made in this province," he said.

"I am pleased to the extent that we are going to now have the opportunity to have a public discussion, which is not gone on at any time in the last 10 years, about fair and effective taxation in our province."

Finance Minister Kevin Falcon has estimated that scrapping the HST will cost the province about $3 billion in the next few years. The B.C. government will have to borrow to pay back the $1.6 billion transition fund from the federal government, with a payment schedule that will have to be negotiated with Ottawa.

"While I really think that is Kevin Falcon's file to have to try and figure out. I would add though that when the federal government was paying us the $1.6 billion nobody lit their hair on fire and said, 'Oh my God, the federal government has to give up $1.6 billion," added Keating.

"So, I think it is only fair that the province is going to have to figure out a way to pay that back. I really think the federal government, as well, as Jack Layton said in the last campaign, is complicit in this whole HST debacle in B.C. and they should probably be forgiving it."

The finance ministry also projected that the HST would bring in an additional $600 million in revenues in each of the next two years, based on economic growth and extending the seven-per-cent provincial portion of the sales tax to a variety of services covered by the federal goods and services tax.

Another cost to the provincial budget will be re-establishing a provincial sales tax administration and audit department. About 300 provincial tax collectors were transferred to the federal payroll when the HST took effect in July 2010.

Businesses will have to forgo input tax credits available under the HST, and convert cash registers and accounting systems back to collecting the GST and PST separately.

The B.C. government finished the 2010-11 fiscal year with a deficit of $309 million. Revenues for the year included the second instalment of the federal HST transition fund.

More North Shore takes on the decision to come....

-with files from Bruce Walkinshaw and Sean Kolenko