Sep 30, 2010
Posted by Webmaster 28,300 views so far
When the Liberals tried to defeat the citizen Initiative petition, they made a number of false assertions about the tax. So we put out a Top Ten Liberal Myths list to dispel the half truths and misinformation for people. They lost the first debate on the HST, and now they want to have a second. But once again they are making wild assertions that have no grounds in reality. Following are eighteen new myths (yes, they are growing) perpetrated by the BC Liberals:
1. Myth #1 – Getting rid of the HST will cost too much
False – The government claims it must repay a $1.6B “penalty” to the federal government if they cancel the HST. Of course, this is money they never had to begin with, so it’s not a penalty. But to put it in perspective, this amounts to under ¾ of a percent of the $200 billion government will spend over the 5 year term of the HST deal. $1.6B is the price of the new roof for BC Place stadium and one other mega project. But the good news is that Finance Minister Colin Hansen announced on Sept. 20th that he is projecting an unexpected “windfall” to government of $2.7B in higher corporate income taxes. Ironically, the same big business groups that went to court to try to strike down the people’s petition will now be able help pay back the money needed to cancel the HST.
2. Myth # 2 – The HST is a more efficient tax
False – Many businesses complain that the burden of HST tax collection now falls to them, without compensation. But even if combining the GST with the PST on one form is easier, who says we must give away control of our taxation authority to Ottawa to achieve this? In Quebec, they have a “Quebec Sales Tax” run by the province where GST is collected on the same form, and THEY remit the money to Ottawa – not the other way around. In BC we are relinquishing our provincial sovereignty to Ottawa, where Ontario and Quebec will now vote to decide the HST rates, rebates and applications for BC. We will lose the unilateral ability to determine rates, create exemptions, and direct our tax policy and will become like a giant municipality awaiting transfers from Ottawa of our own money!
3. Myth # 3 – Ending the HST will result in cuts to health, education and services
False – The government says the HST is revenue neutral, meaning it is a transfer of $2B in the tax burden from corporations to consumers. This means there are no additional revenues to government so there is no need for cuts to any programs from cancelling the tax. As well, the government says implementation of the HST will mean a net loss of revenues in year one of -$184M. If that is true, getting rid of the HST will prevent cuts to services. But even if they are not telling the truth, they are projecting a $2.7B surplus in corporate income tax revenues. They can use this to repay any money to the federal government, and they would still have enough to refund everyone the money they took against our will.
4. Myth #4 – The problem with the HST is not the tax but how it was rolled out
False – This might be laughable if it weren’t so insulting. The HST was rolled out exactly as Premier Gordon Campbell wanted – late on a hot summer Friday afternoon when no one was paying attention. He got caught, and the rest is history. Saying now that they handled it badly is indicative of the arrogance, condescension and duplicity that characterize this government and everything they do. The people know what the HST is and they don’t want it, thank you very much.
5. Myth # 5 – The HST isn’t so bad after all
False – Since July 1st when the HST came into effect in BC and Ontario, and went up to 15% in Nova Scotia, consumer confidence, business confidence and consumer spending has dropped significantly in those provinces. The HST has hit things like strata fees, resulting in rent increases to offset the costs. It has hit businesses with commercial leases, adding large costs some cannot afford. Seniors and fixed income people have seen the cost of non-prescription medicines, rents, packaged foods and basic living all go up as a result of the HST. Families are cutting back and going without just to meet their family budgets. Many businesses report losses of between 10% and 20% in customer spending. Real estate investment, new home construction, renovations, restaurants and most service based businesses report a drop in business. In the case of new home construction, one of the key economic drivers in BC, the industry has been hit with a double whammy – first the HST and now a referendum to be held one year from now that will see consumers waiting to see if the tax is repealed before purchasing a new home.
6. Myth # 6 – The HST penalizes big spender’s more than low income people
False – The HST is a regressive tax that applies equally to everyone regardless of income. While it is true that a person who spends more will pay more, it is also true that a person with a fixed or lower income must consume many of the same products as a richer person, thereby using a much greater percentage of their income to survive. The HST rebates to low income people do not nearly cover off the full additional cost of HST in one year, and especially not over a 5 year period when the purchase of a used automobile, a computer repair, or repairs to one’s home might also be factored in. Also, if 1.1 million people are getting a cheque for $230 per year, then it means the other 2 million adult British Columbians will have to carry even more of the HST burden. And no government today can guarantee the rebates will still be in effect 3 years from now. Remember the grants for the purchase of energy saving devices? All cancelled by this same government.
7. Myth # 7 – If the HST is cancelled 1.1 million people will lose rebate cheques
False – This one is a little too obvious, but it has to be said: If there is no HST, you don’t need a rebate cheque to offset it. But even with rebate cheques, a modest consumer is likely to pay more than $230 in HST in a year. A $2,000 used car alone will ding you for $100 in additional taxes. Every time you buy “used” clothing over $100, you will pay $7 more. Non-prescription medications – add 7%. Haircuts, fast food, computer repairs, parking, school supplies, and campgrounds – add 7%. Oh yes, and funerals – 7% more – just in case you thought you could escape the HST by dying.
8. Myth # 8 – Voting against the HST will hurt the economy and job creation
False – Suggesting that Manitoba and Saskatchewan (two of the most booming economies in Canada right now) will suddenly become uncompetitive because Ontario has an HST would be news to their governments, who have soundly rejected the HST. A C.D. Howe Institute report from 2008 (made available to the BC Government before it adopted he HST) showed that implementing the HST in BC would have a negative impact on the economy and would create job losses for a minimum of 5 years, and could take as long as 10 years to fully recover from. BC is a service and resource based economy. Job creation and prices are driven by worldwide demand for resources, not a refund cheque from government to big corporations headquartered in the U.S., Asia, Europe or other parts of Canada.
9. Myth #9 – Most economists favour the HST
False – Most economists says bringing in a new tax during an economic recovery is a bad thing that will curb growth and spending at a time when the economy needs this to recover. Decoupling the introduction of the HST from the economic realities we are facing is a convenient way of avoiding that argument. As well, the fact that economists believe a value added tax is more efficient doesn’t make it more fair, more equitable, nor does it require handing over provincial control of taxes to Ottawa. Most economists also said Europe’s VAT model was sound, but the European economy is now in deep trouble, and VAT avoidance is so prevalent in places like the UK that they are losing $20B-$30B in revenues from the underground economy every year! Everywhere in Europe that this happens results in an increase to the VAT, driving even more of the economy underground, and harming tax revenues further.
10. Myth #10 – the HST is the best thing we can do for the economy of BC
False – If the economy is so bad that deficit projections went from $485M before the last election to $2.8B only days after, and according to the finance minister the HST was suddenly “needed”, then why did the government vote themselves huge raises and an increase to their pensions after that election? And why did the former finance minister, Carol Taylor, say it was bad for BC and an unfair hit on the poor? If it was the best thing for the economy, why didn’t the BC Liberals campaign on it during the election? The HST has never been about what is best for BC. It is about what is best for Gordon Campbell and his big corporate donors.
11. Myth # 11 – Prices will come down under the HST
False – In case you didn’t notice, not only have prices not come down, in many cases they have gone up even higher than the additional 7% tax on many goods and services. People are finding everything from a regular cup of coffee, to a restaurant meal to the cost of haircuts and everything in between seems to be much higher than before, as companies use the tax to piggy back price increases in order to make up for lost business – the exact reverse of what we were told. Even in government liquor stores, where the HST created a net decrease of 3% in the cost of liquor, the government chose to up the price and keep the difference. Doesn’t that just take the cake?
12. Myth #12 – You may hate the HST, but the alternatives are worse
False- This is simply not true, and is designed to make British Columbians think the debate is either HST or not. There are many options to the HST, and a full discussion exploring all choices is needed to ensure BC’s tax system is what works best for us. Some examples: A reformed value added PST of 4% controlled by BC instead of Ottawa, with input tax credits to businesses tied to economic growth and job creation. (No point giving tax refunds to a logging company for shipping raw logs to China). Another idea might be phasing out the PST altogether – like Alberta. Premier Campbell used to argue that reducing taxes stimulated economic activity and generated more revenues to government – but not when it comes to HST. BC’s rich resource revenues, if properly managed, could also make up the difference of phasing out the PST over time. Another idea is to control government waste and spending rather than always coming back to taxpayers to foot the bill for mismanagement. Government could cut out new mega projects that reward huge developers but do little for BC. Projects like the Convention Centre, the Olympic Athletes’ village, the Sea to Sky highway or the Port Mann Bridge where they will tear down a perfectly good 6 lane bridge with 60 years of life and replace it with 10 lanes at an astronomical price.
13. Myth #13 – A Referendum is needed to hear from the people
False – Over 710,000 British Columbians signed the petition to repeal the HST in 90 days. It would have been double if we have been allowed a voter’s list. But the reality is the government knows what the people think of their tax. They want to use a referendum to intimidate voters into compliance with their agenda. This is evidenced by the fact the so called “referendum” promised by Premier Campbell is not a referendum at all. He refuses to conduct the vote under the Referendum Act to ensure it is a binding, simple majority with rules on spending that apply to both sides. This is because he plans to spend tens of millions of our tax dollars to bully us into thinking we are wrong and he is right. And none of this is needed. He could have had the legislature vote on the HST for free. Instead he will spend $30 – $50 million taxpayer dollars on a vote he has said will not be about the petition that we are supposed to be voting on. How can anyone trust that he will keep his word when the final vote is tallied?
14. Myth # 14 – We need a debate on the HST
False – As Peter Simpson from the Greater Vancouver Home Builders Association said recently “I don’t recall another issue that has been as front and centre as HST”. We had a debate during the petition. The government lost. Now they want another one, but they will lose that too, because we are all living with the tax now and it is no longer an abstract idea. We see the damage from it all around us. And the debate has always been and is about how the government deceived us in the last election, and continues to deceive us every time they talk about the tax. The debate is about democracy and whether the people control their government, or the government controls the people. And there can only be one winner if democracy is to prevail in BC. But they don’t really want a debate. Bill Vander Zalm is willing to debate Premier Campbell or Finance Minister Colin Hansen anytime, and has been asked numerous times by media to participate in a public debate. But neither the premier or finance minister will accept. What does that tell you about their desire for a debate about their tax?
15. Myth #15 – Each Recall will cost taxpayers $500,000
False – This message came from Elections BC, the “independent” body overseeing the voting process in BC (you know, the one where the ‘acting’ Chief Electoral Officer refused to submit the petition to the Standing Committee under pressure from the big business lobby). The fact is, Fight HST has not received a penny in government funding for the petition, and will not receive anything for Recalls either. We are financed entirely by private donations, mostly in $20, $50 and $100 amounts from average, everyday working people. However, we can’t control what government does, and they are planning to spend millions of your dollars to convince you that you were wrong.
16. Myth # 16 – HST was not on the government’s radar before the last election
False – Freedom of Information documents obtained by CTV show that not only was the HST being discussed and negotiated by the BC government with their counterparts in Ottawa well before the last election, the discussions were initiated by the Finance Minister. His suggestion that he “didn’t read” the briefs presented to him, and that his bureaucrats were spending tens of thousands of taxpayer dollars in time working on an issue the government had no interest in would be a joke if it weren’t so serious. Also, huge sections of information were removed on the documents by government before being released to the media. Why? And even if it they weren’t lying, a man in the position of Finance Minister who doesn’t know what is going on in his own ministry should be fired for such utter incompetence.
17. Myth #17 – Refunding British Columbians will be administratively impossible
False – The formula in our HST Extinguishment Act is to refund all extra HST monies over and above what would have been collect through PST to every British Columbian on a per capita basis. There is no need for receipts or records. The government simply has to divide the amount of extra cash collected from the HST by the population of BC, and send each one of us a cheque. It is no more complicated to provide a refund for the HST than it is for the BC Liberals’ carbon tax rebates. Chief Justice Robert Bauman of the Supreme Court said our formula was a model of simplicity and clarity. But for a finance minister who claims he doesn’t even know what goes on in his own department on the biggest tax issue in BC history, it probably does seem “impossible”.
18. Myth #18 – Voting against the HST is just a vote against the BC Liberals
False – They say that like it’s a bad thing. That aside, the opposition to the HST is as much about democracy as it is the tax itself. But this comment can cut both ways: Voting for the HST can be considered a vote against the people. Polls show consistently that 85% of British Columbians are against the HST. 710,000 people signed the first successful petition in Canadian history to repeal it. It doesn’t matter if the HST is the greatest tax in the world (don’t worry, it isn’t), when the people don’t want it the government must respect their wishes or we are not living in a democracy anymore. And be warned – if the government is finally able to intimidate British Columbians into accepting their tax, we won’t get better government from them, we’ll only get worse.
Tags: 7b, bc liberals, business groups, citizen initiative, corporate income taxes, false assertions, finance minister, GST, hansen, hst rates, initiative petition, liberal myths, mega project, misinformation, myth, quebec sales tax, rebates, sovereignty, windfall