While a province-wide referendum on the HST is good for democracy in B.C., it will likely create an unprecedented level of uncertainty and hinder investment in the province.
Jock Finlayson, executive-vice-president of policy for the Business Council of BC said, “I don’t have any criticism or concern specifically with what the legislative committee has recommended, but it is uncharted waters. We don’t have much experience in Canada and in B.C. with this kind of situation. We’ve been surprised, so far how this issue has played out and maybe there are more surprises to come. I think there’s just a lot of uncertainty around it.”
On Monday afternoon, the legislative committee exploring the options for the anti-HST petition organized by former premier Bill Vander Zalm voted to put the HST to a non-binding public referendum next September rather than draft a bill to scrap the HST and have it voted on in the legislature this fall.
Premier Gordon Campbell subsequently said the government would abide by the referendum’s result.
Finlayson noted the move would give proponents of the HST time to educate the public on the long-term benefits of the widely disliked tax. He was uncertain, however, whether any effort would be effective with so many variables up in the air. “Whether we’ll be successful, I don’t know.”
A key issue most anti-HST proponents have not considered, he said, is where the government is going to get the tax income lost if the HST is killed.
“Unless you believe the government can function with $5 billion less revenue than it currently gets, clearly there will be a legitimate issue on the agenda of how you’re going to get it and where it’s going to come from,” he said. “Will it be replaced by the old sales tax, or increases in personal income taxes, or business taxes? That revenue is going to have to come from somewhere and that creates uncertainty for business and for taxpayers.”