BC Liberals mulled HST before election: documents
Published Wednesday, September 1, 2010 7:04PM PDT
The B.C. Liberal government was discussing and studying the Harmonized Sales Tax five months before they actually told British Columbians about it.
Communication at B.C.'s Ministry of Finance obtained through an Access to Information request by a consortium of press gallery members shows that the B.C. government was already conducting cost-benefit analyses for consumers and businesses about the controversial tax long before its May 2009 election.
The emails, briefing notes and feasibility studies, dated between Jan. 1 and May 12, 2009, appear to contradict statements by Gordon Campbell who said the tax "wasn't on his radar" during election time.
"We were transparent, we were open, we told people what their assumptions were, we've been very clear when it comes to the HST," Campbell told reporters the day the B.C. legislature opened in August 2009.
The BC Liberal Party even told the Canadian Restaurant and Food Association in an email during the election that the HST wasn't even on the table, saying it had "no plans to formally engage the federal government in discussions about potential harmonization."
But multiple documents show the Liberal party spoke at length about the implementation of the controversial tax, including how it could potentially negatively affect the status of the party.
Briefing notes at a First Ministers' meeting in Ottawa on Jan. 16, 2009 -- five months before the election -- says the BC Liberals recognized the potential economic benefit of harmonizing with the GST, but that the party "continues to have concerns:"
"However, harmonization continues to present very real challenges including a loss of provincial tax policy flexibility, the real and perceived shift in tax burden from business to individuals, a lack of support from some business sectors, the need to protect low income individuals and families from tax increases, and the need to ensure adequate revenues."
A summary at the same meeting also shows a deep background and analysis of what the tax would mean for B.C. business if it was introduced.
"The issue of combining the provincial sales tax with the federal GST into a harmonized sales tax is often raised and supported by many businesses and business associations, including Chambers of Commerce. Some business sectors, such as the restaurant industry, strongly oppose it," it said.
Five days later, an official from the strategic and corporate policy division of B.C.'s Ministry of Finance sent an email about a new report on business tax from the Canada West Foundation.
The report, called "Business Taxation in Western Canada: Setting for a Personal Best" recommends cutting business taxes and harmonizing the provincial sales tax.
Emails in late January from the Federal Finance Minister's office to the B.C.'s Finance Minister's office discuss the upcoming federal budget and the hope that more provinces move towards harmonizing its sales tax.
From this point onward, the ministry started to produce additional briefing notes for Finance Minister Colin Hansen on the pros and cons of the HST.
One such briefing note, dated March 12, warns Hansen to prepare himself for questioning about the tax.
"There is a strong possibility that the B.C. government will be asked in the next couple of weeks about its position on harmonization."
On March 25, officials in the Finance Minister's office forwarded an email with a link to a media article considering the consumer backlash of HST in Ontario.
In one email an official asks if there is a possibility of being questioned about harmonized sales tax. Another official replied, saying "we have prepared a note for the minister on this."
The following day, when Ontario tabled its provincial budget, the Minister of Finance of Canada sent its memorandum of understanding between the federal and Ontario government to the B.C. Ministry of Finance so that B.C. would know how its HST will be implemented.
'It's disgusting': Vander Zalm
Former premier and head of the anti-HST campaign Bill Vander Zalm described the latest revelations as "disgusting" in an interview with CTV News.
"They've been telling us all along (HST discussions) didn't start until after the election. It's awful, it's terrible," he said. "At the very least, the premier and minister of finance should resign."
But he added that the news isn't exactly surprising.
"This information now is simply confirming what the public felt all along," he said. "The people have been conned. The people have been manipulated."
A public opinion poll released in July by Angus Reid Public Opinion showed the Liberals' popularity dropped dramatically after the implementation of the tax.
At the time, more than three-quarters of its 800 respondents said they were against the new tax.
Only a few weeks earlier, Bill Good questioned Campbell on the issue on his CKNW radio show, asking the premier if he misjudged the B.C. electorate when he introduced the HST.
He replied: "Well Bill, there's no question that this came out of the blue for everybody."
Mario Canseco of Angus Reid told CTV News on Wednesday that the drop in support for the Liberals has been drastic.
"From the moment the HST was discussed, support for the BC Liberals has gone down severely," he said.
"The only demographic group that is actively supporting the Liberals more than the NDP is people who live in households earning more than $100,000 per year."
Canseco said that the drop in approval rates isn't necessarily about the HST itself, but the way the tax was introduced.
"When we ask people if they're satisfied with the way this has been implemented, the way this was explained, three out of four B.C. voters will tell us that this was handled very badly," he said.
But he added that other scandals, like the controversial sale of BC Rail and the trials of former legislative aides Dave Basi and Bobby Virk, have also hurt the Liberals.
"There's been a lot of things that haven't been working for the government, and there's this sense that the government isn't telling us everything," Canseco said.