An HST Ray Of Hope

Tony Wanless

| September 24, 2010

Finally, it appears we have some semblance of intelligence in the HST wars going on in this province.

To date, the HST debate -- and I use the term very loosely -- has been almost all emotion.

Opponents either hate the thought of taxes, hate "business", hate the government because they believe it blindsided them with the tax, or just hate the Liberals, period.

Supporters insist that the HST is the saviour of our province's faltering economy because it's more efficient and is in reality fairer than the old PST system. But nobody's listening to that because, it's boring and can't stand up to simplistic "the government sucks" rhetoric.

Both sides remain in fixed positions, with opponents drunk on how they've made the government quake in its boots, and the government mumbling, okay, we're not admitting anything but we sort of hear you on this, and we'll let you vote on it next year when you've (it's hoped) spent your anger and gotten on with your lives.

It's a war that lacks intelligence because it has little to do with the tax, or economics, and very much to do with how you "feel" about government. For example, I don't see people marching in the streets when government kicks up booze prices by 20%. That often has no basis in anything but greed, but no one raises a whimper. Could that be because it has nothing to do with politics or "big business"?

But there has emerged a lonely voice that has a solution to this stand-off -- if anyone is actually looking for such a thing.

Jon Kesselman, of the SFU School of Public Policy, has studied the HST in both Ontario and BC and concluded that lowering the HST by one per cent would make it more palatable to all, and therefore avoid many of the terrible outcomes of reversing the HST.

And make no mistake: If the anti-HST forces make the government "repeal" the tax, there will be severe repercussions. We'll have to repay the Feds the $1.6 billion they gave us to make the switch; we'll have to install the old PST regime and hire back an entire bureaucracy to administer it; consumers will pay more because they will not only have to pay the PST, but pay higher costs because businesses that serve them will also have to pay the PST and won't be compensated for it.

Kesselman's point is that an HST of 11% would be better than a combined HST of 5% and a PST of 7% (12%). It might also convince those voters out there who have been bamboozled into thinking that the HST is some kind of "new" tax that's a gift to big business at the expense of the little guy, to look at the situation with a relatively unjaundiced eye.

At least that's my hope. Intelligence has a hard time being heard over all the shouting that's going on out there.