Two in five British Columbians are putting major purchases on hold because of the harmonized sales tax, a new poll finds, suggesting that the government's delay in killing the controversial tax is stalling the economy.
In an exclusive Angus Reid Public Opinion survey commissioned by CTV's Steele on Your Side, 40 per cent of respondents said they have held off on some major purchase, such as a new car, television, work with a contractor or a holiday, because they don't want to be subject to the additional tax.
That percentage jumps to 44 per cent when looking at middle-aged respondents. Fifty-two per cent of those polled in Northern B.C. said they were putting off major purchases.
"There's a huge chunk of B.C. residents who are looking at this and saying ‘I don't want to spend the money now, I'll spend it when the HST is over.' But we're still 13 months away from that happening," pollster Mario Canseco said.
Sixty-six per cent of respondents said they are disappointed by the BC Liberals' plan to phase out the HST by March 2013.
Three-in-five British Columbians (60 per cent) think the government's timeline to go back to the provincial sales tax (PST) and goods and services tax (GST) system is too long, including 68 per cent of people in Vancouver Island, 65 per cent of those over the age of 55, and 85 per cent of those who voted "Yes" to scrap the HST in 2011.
"This is not just those who voted ‘Yes' who are saying ‘do this immediately,' but many people actually saying ‘this is a really long time. You should be able to do this a little bit quicker than what you said," Canseco said.
Provincial Finance Minister Kevin Falcon is expected to introduce new transitional rules about the HST on Friday.
Falcon said while details are still being hammered out, the rules should bring more certainty to the housing industry, which maintains the transition process is threatening the creation of thousands of construction jobs and residential housing units.
B.C. homebuilders and developers say the HST is pushing potential new home buyers to wait to buy until the combined tax is gone to take advantage of the cheaper provincial sales tax.
M.J. Whitemarsh of the Canadian Home Builders Association of B.C. wants the government to offer an HST rebate to consumers buying new homes and doing renovations while the tax is still in existence.
"Every house that starts creates three person years of employment," she told CTV News on Wednesday.
"There's about 50, $60,000 of spinoff spending for every house that's built that goes back into the economy. So I can't believe the government would totally ignore this sector and not want to do something to spur it."
But Falcon denies that the HST has hurt the housing industry. On Wednesday he cited a CMHC survey that housing starts were up significantly this January, compared to the year before.
Falcon says the timeline to phase out the tax is justified. He said there are 30,000 new businesses that have never operated under a PST system because they started after the introduction of the HST.
"There's a lot of work to be done so when we flick that switch on March 31, 2013, so that it works for everyone," he said.
But with many people sitting on their wallets because of the extra tax burden, Canseco predicts a flurry of economic activity will be generated quickly when the HST is finally gone.
"We would be buying those new cars and those new televisions if there wasn't the HST," he said. "What's also difficult about this is that it actually pushes consumers to the underground economy. They'd rather pay cash instead of paying the HST."
British Columbians voted to abolish the HST in a referendum last summer.
Angus Reid Public Opinion polled 801 randomly selected people from Feb. 7 to 9. It claims a margin of error of +/-3.5%.
Watch CTV for the full results of our exclusive poll, plus a full report from Lynda Steele…
Have your say: Have you put off purchases because of the HST?
