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BC kills the HST in the referendum

B.C. voters rejected the controversial harmonized sales tax in the referendum, although the majority of Central Okanagan residents would have preferred to maintain the status quo.

Results of the mail-in referendum were announced Friday by Elections BC, which spent weeks tallying 1.6-million ballots mailed in by voters.

In total, 881,198 voted to extinguish the tax, making up 54.73 per cent of the vote, while 728,927 voted to keep it afloat, amounting to 45.27 per cent of the vote.

Although the majority of the province was in favour of killing the tax,  constituencies generally voted in line with the elected official in their area. The strongest vote against the HST was more than 75 per cent in the NDP-held Surrey-Green Timbers and more than 72 per cent in Surrey-Newton and Vancouver-Kingsway, the home constituency of NDP leader Adrian Dix.

A narrow majority of voters supported the tax in Central Okanagan ridings, which are held by the B.C. Liberals.

In Kelowna-Lake Country 53.10 per cent of 22,613 eligible voters wanted to keep the HST. In Kelowna-Mission 55.58 per cent of 22,795 voters wanted it to stay, and 53.7 per cent of 20,784 voters in the Westside Kelowna riding wanted it to remain.

The strongest support for the HST was more than 64 per cent in West Vancouver-Capilano and 62 per cent in Vancouver-Quilchena, the seat held by Colin Hansen, the former finance minister who introduced the tax in 2009.

Locally, accountant Heather Weber, who spoke in favour of the HST at a debate between pro and anti-HST proponents in Kelowna and was featured in provincial pro-HST television advertisements, said she was disapointed by the result but not surprised.

"It's unfortunate because it's not the right way to go," said Weber.

She said she expected the vote to be close.

As to where B.C. goes from here, she said with such a big impact on businesses across the province, it will be important for the government to provide as much information as quickly as possible to the public and to business about the transistion.

In Victoria, Finance Minister Kevin Falcon that is exactly what the government plans to do.

"This has been a lesson on how not to introduce public policy change," said Falcon.

He said the transition period will likely be over the next 18 months. He said he will talk to federal Finance Minister Jim Faherty in October.

"This is a big bump in the road but a significant bump in the road," said Falcon, referring to the result of the referendum. "It is, however, a manageable bump in the road."

On of the biggest results of the referendum is that the province will now have to pay the federal government back $1.6 billion that it received from Ottawa as a transition payment when B.C. moved to the HST in July 2010.

Meanwhile, other reactions poured in, but the Business Council of British Columbia came out of the gate early, calling on the government to quickly turn its attention to addressing the short term impacts of the transition back to a separate provincial sales tax as well as lingering problems with making B.C. attractive to investors, which the HST was said to address.

“Specifically, there is an urgent need to focus on B.C.’s lagging competiveness, our poor productivity, and most importantly the challenge of attracting the capital that is required to build our economy, invest in innovation and harness our natural assets to create jobs,” stated Jock Finlayson, executive vice-president of the Business Council of B.C.

The Business Council will be establishing a Task Force on Productivity, Competition and Innovation with a mandate to develop proposals to enhance the investment climate and improve British Columbia’s ability to attract capital and create jobs.  It will work with key industry sectors that underpin B.C.’s prosperity to come up with practical and innovative ideas to develop a stronger and more competitive provincial economy.

More enthused by the change in direction is the restaurant industry.

The British Columbia Restaurant and Foodservices Association were particularly vocal about their disdain for the tax, prior to referendum results.

"We applaud the provincial government for having the courage to put the HST decision in the hands of the general public"' said President/CEO Ian Tostenson.

" This has been a very exhausting and at times divisive issue for business, consumers and government."

 

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