Nearly 55 per cent of BC voters have rejected the harmonized sales tax adopted last year. In the Nelson-Creston constituency, that number was over 64 per cent.
Reactions, not surprisingly, have been mixed.
“Like many in the business community the Creston Valley Chamber of Commerce is disappointed with the outcome of the HST referendum,” president Rob Schepers said last week. “We now support calls for a dialogue to take place that puts jobs first under a competitive tax system.”
“It’s a disappointing decision that will have a profound impact on the economy, on business, on workers and on unions,” said John Winter, president and CEO of the BC Chamber of Commerce.
“While we respect the outcome of the referendum and the need to restore a PST/GST system, our members have been clear we need a dialogue on what that looks like and how we can create a tax system that protects B.C. jobs.”
The harmonized sales tax, which blended the former provincial sales tax with the federal goods and services tax, was introduced by the B.C. government shortly after the last provincial election. A massive campaign to reverse the taxation program, which added to the price of some goods and services, such as restaurant meals, led to a mail-in referendum vote this summer.
“We will support the British Columbia Chamber of Commerce in encouraging the B.C. government to explore fiscal and policy approaches that can restore some of the economic competitiveness and efficiency lost with the return of a PST/GST,” Schepers said. “We’re also concerned about B.C.’s balance sheet knowing that a return to a PST/GST comes at a cost identified by the expert panel as $2.7 billion-plus direct industry and small business costs in the hundreds of millions.
“With a $1.6 billion bill to pay back to Ottawa, B.C. will be forced to make difficult decisions affecting all British Columbians. This is especially concerning for rural areas that have already experienced cut backs and loss of services. Business confidence, certainty and jobs are at risk.
“The B.C. business community will come forward to government with options on how to transition to a PST/GST as well as explore opportunities for a new consumption tax model.”
Creston restaurateur Anthony Kwan, who operates Kootenay Thai Restaurant in the Hacienda Inn, was all smiles at the news the HST had gone down to defeat.
“It’s a good day for restaurants,” he said.
Kwan ran an award-winning Thai restaurant in Vancouver, but chose not to renew his property lease last summer.
“Restaurants in Vancouver got hit with a triple whammy,” he said on Friday. “The HST raised prices for our customers, the new drinking and driving laws discouraged people from ordering alcohol with their meals and the City of Vancouver started charging for metered parking until 10 p.m. each night. I decided to get out and start again.”
Erickson cherry grower and juice producer Susan Snow was a proponent of the HST, which she said benefited farmers.
“It is such a long story,” she said. “The B.C. government forced the combining of two taxes PST (provincial sales tax) and GST (goods and service tax) and the federal government gave the province $1.6 billion to do this and they called it HST — and businesses such as ours, where we weren't able to get back PST on items purchased, could, under the combined HST, get all the tax back. Finally, something to help the small businessperson.
“There was so much controversy over their doing this because there were certain consumption taxes that people didn't have to pay before that they did now under the HST — so they figured they would be spending pennies more (but on luxury items for the most part). People were upset because it was basically forced on them with no input from the people.”
The vote to return to the PST/GST system creates new problems for small businesses and the province, she said.
“What people don't maybe realize is that the province now has to pay back that $1.6 billion and that will come out of services somewhere and small business is pretty much screwed,” Snow said. “My hopes in hiring extra help just went down the drain. In an already depressed area such as Creston, that is pretty sad. How are the poor going to get any richer without jobs?”