B.C. Finance Minister Colin Hansen has responded to rumours that the government is reducing the HST by one per cent, dismissing them as pure fantasy.

Anti-HST crusader Bill Vander Zalm announced late Wednesday night that "reliable sources" had informed him Premier Gordon Campbell would announce the tax cut, as well as a new date for the pending HST referendum, at the Union of British Columbia Municipalities Convention on Friday.

"That would be good news because it shows another small win for the people," Vander Zalm told ctvbc.ca on Thursday. "We won't know for sure until tomorrow morning."

The reduction would be followed by another one per cent cut to come after the pending HST referendum.

Hansen vehemently denied all of Vander Zalm's claims.

"Clearly Mr. Vander Zalm is living on Fantasy Island," he said. "He is constantly making things up that has no factual basis to it and I don't know where he's hearing these voices but they're not based on fact."

Campbell's office also denied any such plans were in the works.

On Thursday afternoon, Vander Zalm said his unnamed source had changed their tune, and that the province may be tinkering with another tax altogether.

"Apparently now the information is that it might not be the HST that [Campbell] will be addressing, but rather the property purchase tax, or the property transfer tax as it's now called," he said.

"That I would welcome. I've been trying to get that changed for 20 years."

The property transfer tax was introduced in 1988 under Vander Zalm and his Social Credit government.

Whether the HST rumours prove true or not, the former premier said his recall campaign is moving forward full-steam.

"Our fight has been to eliminate the HST, not reduce it," he said. "We're passing off a provincial right to the federal government, which means that Quebec and Ontario are making the decisions in response to a tax in B.C."

"That bothers me and bothers a lot of people."