The tribe has spoken and the Harmonized Sales Tax (HST) was voted off the island of B.C. taxation with the unpopular tax being defeated by 54.73 per cent of eligible voters.
In the Boundary-Similkameen region, the numbers were slightly higher, with 59.48 per cent voting to extinguish the tax and 40.52 per cent voting to keep it – 16,272 valid votes were counted.
The tax has been controversial and polarizing ever since former Premier Gordon Campbell, Finance Minister Colin Hansen and the B.C. Liberals introduced the tax in 2009 – after promising not to in their election campaign months previous.
Current Premier Christy Clark vows to re-implement the old tax system, which saw provincial and goods and services taxation but there could be more tax increases on the horizon.
Because the HST system has been in use for over a year – it took effect in July of 2010 – it will cost money to switch back to the old tax regime and it doesn’t look like it will come cheap.
Kevin Falcon, the province’s current finance minister, has been quoted as saying the estimated cost of getting rid of the HST will cost approximately $3 billion over the next few years and says the B.C. Liberals will have to borrow to repay a $1.6 billion transition fund to the feds.
He hints that the province will have to curb spending and is eyeing 2013-14 as a time when the budget will be balanced.
Just because the HST was defeated, doesn’t mean that the B.C. Liberals won’t try to increase taxes in other areas.
The HST was expected to bring in an extra $600 million over the next two years but without that revenue and the cost of reverting back to the previous system, it isn’t out of the realm of possibility for the provincial sales tax to increase and the government to make cuts in other areas to account for the HST-extinguishing costs.
While the B.C. Nurses’ Union said that the referendum results show that British Columbians don’t want to be left in the proverbial dark when it comes to the decisions that affect their lives, it expresses concern that there could be health care cuts with the loss of HST-related revenue.
Some people may have gotten their wish with the extinguishing of the HST but you can be sure that the government will find some other way to account for the loss in HST-related revenue.
– Grand Forks Gazette