Christy Clark could have stayed on the sidelines. She could have told British Columbians that she would abide by whatever voters decided to do with the controversial Harmonized Sales Tax (HST) in next month's referendum. The tax was, after all, brought in by her predecessor, Gordon Campbell, when she wasn't even part of the government. Leaving it in the hands of the voters would likely have reduced the degree of political risk to Premier Clark and her government.
But in tweaking the tax - saying she will reduce the tax by two cents over the next three years, provide "transition cheques" to families and seniors and raise corporate taxes by two per cent - she has raised the stakes. She has come down on the side of those who want to keep the tax by attempting to buy referendum votes with voters' own money.
It will probably work, but it comes with the risk that the new premier will damage her, and her government's, credibility. The government's "fix" came too late to change the information about the tax on the mail-in ballots that will start going out to voters on June 13. Given that, the question now becomes, "Do we trust the premier and her government to follow through with the proposed 'fix' if we vote in favour?"
In a column published Thursday (May 26) on the online news site The Tyee, David Schreck, political analyst and former NDP MLA, wrote, "Critics point to the B.C. Liberal record on broken HEU contracts, the sale of B.C. Rail, broken teacher contracts on class size and composition, the HST and corporate tax cuts which followed the 2001, 2005 and 2009 elections with no mention of those cuts during the election. They ask if Clark can suddenly announce an increase in business taxes, what might she do after an election with respect to the HST rate? Would unexpected economic events be used as justification for a change in plans?
"That is why the referendum could become a vote on whether she can be trusted rather than on the merits of the tax."
Until recently, the government's efforts to sell the tax to British Columbians appeared to be paying off, with polls showing at least grudging acceptance of the tax on the increase. Most economists, the government kept saying, were in favour of the tax because it would result in savings to industry, which would use the extra money to create new jobs yadda, yadda. But on May 4, a four-member, government-appointed panel issued a report that undermined many of the government's selling points for the tax. The tax has so far not been revenue-neutral, as the government had claimed, and the job-growth benefits are now predicted to be far more modest than the government had predicted.
In announcing the "fix," Finance Minister Kevin Falcon is essentially acknowledging that earlier government promises about the HST's effects were inaccurate -but not to worry, because we're going to fix it. Again, the government's credibility suffers. They'll say anything to win our support um, won't they?
As we said, it'll probably work. Premier Clark's decision to jump on board with the pro-HST crowd ensures that if it doesn't, the consequences to her government and leadership will be much more severe.
- David Burke
