Growing a healthy tax policy

A column by MLA Norm Letnick.

Now that HST referendum packages are being sent to every home in British Columbia, I’d like to explain how I will be voting.

I’ll be voting to keep the HST. This may come as no surprise, but I sincerely believe the value-added tax (or VAT), such as the HST, is a superior tax model than the old GST/PST system – as do the overwhelming majority of economists. That’s why dozens of other jurisdictions around the world have all adopted similar systems.

Since and before being elected, my passion has been to see that people have access to a strong publicly funded health care system. Every day we face significant decisions regarding health care because there are limited dollars to go around. For me the HST will mean a stronger economy, and because of that more revenue that government can use to help a few more people in need.

But that’s not the only reason I’m voting “no, thanks” to returning to the 12 per cent GST/PST.  Representatives from two of our most significant industries – agriculture and tourism, respectively – widely support the 10 per cent HST.

Last week, Okanagan farmers spoke at an event in Kelowna. The event was organized by the Smart Tax Alliance, which also supports the HST. The farmers asked voters to vote “no, thanks” to higher taxes; they estimate the HST saves them $15 to $20 million per year. In an industry with tight margins, that’s significant.

How significant? Joe Sardinha, president of the B.C. Fruit Growers Association, said the “HST represents the most positive tax change for B.C. farmers that has occurred” in his 30 years of farming.

He’s not alone. Earlier this week, Stephen Regan, president of the Tourism Industry Association of B.C., wrote an op-ed in support of keeping the HST.  As he said, this was “not a black and white” issue for him; but given the reduction to 10 per cent and increased consumer confidence since the HST was implemented, he too believes the 10 per cent HST “is the way forward.”

As you consider your choice, there seems to be some confusion about the referendum question itself: “Are you in favour of extinguishing the HST and reinstating the PST in conjunction with the GST?” According to a recent Ipsos Reid poll, Before being shown the actual question, 22 per cent of respondents incorrectly believed a “yes” vote would result in keeping the HST. Another 23 per cent were unsure.

Clarity is absolutely crucial – we’re talking about billions of dollars. For the record, the question was not only based upon Fight HST’s original petition, but met with their approval. So in the interest of clarification, voting “yes” means returning to a 12 per cent GST/PST system, and voting “no” means keeping the 10 per cent HST – and after a recent Order in Council by the federal government, the scheduled reduction to 10 per cent is now a matter of federal law.

When I receive my referendum package, I’m going to say “no, thanks” to going back to the GST/PST combination. I hope you’ll consider doing the same.

 

Norm Letnick is MLA for Kelowna – Lake Country. Visit his website at www.normletnickmla.bc.ca

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