I haven’t weighed in much on the BC government’s decision recently to institute a Harmonized Sales Tax (HST) that combines provincial sales tax with the GST. I try not to complain too much about taxes because I think fundamentally, we have to pay them to have the society we have and its hard to judge a good tax from a bad tax. But its getting harder to stay neutral.
There has been a lot of hubub about this and petitions to reverse the HST. The new tax now promises to become and election issue as well as the federal Liberals recently referred to as the “Harper Sales Tax” blaming the federal Conservatives for encouraging provinces to harmonize to save money. The Liberals would desperately love to get more seats in BC next election and attacking the HST has the double effect of differentiating them from the BC Liberals who instituted it and helping to overcome the Western feeling that the Liberals typify the mythos of the Central Canadian disregard for Western concerns.
One complaint about the HST has been the removal of exemptions that existed under the PST on items that could be taxed including home heating fuel, school supplies, funerals, energy conservation. This has the effect of raising taxes by 7% on these items and many more. The benefit, apparently, would be lower administration costs for the government and businesses (once they spend the money to update their cash registers and accounting systems). The anger comes mostly from the suddenness of the announcement. While the change won’t happen for another year, it was not mentioned at all in the very, very contentious provincial campaign recently and it seems like the kind of thing that would influence one’s vote just a bit to say the least.
Now we see a real dramatic effect of the tax change, Translink may go broke because of the HST. It turns out that Translink gets a lot of its money from a parking tax that goes to them…a parking tax that the HST will eliminate. So now they can’t in good faith promise to complete the projects they have promised to including the much delayed Evergreen Line. The province has promised to build it but didn’t tell Translink about this coming whole in their budget, even allowed their 10 year plan to account for growth in this tax to Translink. Funny thing to do if you knew you were going to get rid of said tax.
So either the BC Liberals just aren’t paying that much attention and decided to institute the HST regardless of its impact on the goals set in the province or they looked carefully at all the pro’s and con’s and decided that ripping and expected $57 million out of Translink’s yearly budget was not important enough to worry about. At a time when we should be building more rapid transit around cities to reduce cars and pollution and increase mobility this is a very bad choice to make without planning for a new sourc of money in the first place.
|Update: The BC government has commented on this issue saying
“Everyone recognizes that needs to happen,” transportation ministry spokesman Crebo said. “We will provide a mechanism for them to raise that revenue if they want.”
“If they want”, gee I wonder? It looks like there are a few funding options available to avoid huge transit cuts but fewer to gain the expected and planned for increase in funding needed to build the Evergreen Line.