On May 8, the B.C. Liberal government-appointed four-person panel, charged with the duty of providing the public with the pros and cons of the Harmonized Sales Tax (HST), released its report.
It was supposed to be published earlier but was delayed in order to allow the panel to "collect more public input" and not interfere with the federal election.
The B.C. Liberal government's initial projection was there would be a break-even point or net loss in the first year, with revenue increases in the following years.
However, the panel found the HST is already adding around $800 million to the provincial coffers, so it is far from revenue-neutral, as the province had predicted, and the tax haul is expected to increase in the following years.
The panel also stated the HST has increased the prices by 17 per cent for the average homeowners' purchases, totalling some $350 a year.
However, its report also noted families with annual earnings below $10,000 (some 15 per cent of the families in British Columbia) will be better off because of the HST rebates.
As for the promise that reduced taxes for the business community under the HST would produce economic growth and create jobs, the panel projected there would be a "modest" growth rate by 2020 in the 1.1 per cent range.
The creation of "new good-paying jobs" figures were far from the government's projection of 113,000 and the panel stated it could be as low as 24,000.
On the flip side of the coin, however, the panel noted that while going back to the old system would put money back in the consumers' jeans, there would be long-term consequences.
Not only would the B.C. Liberal government have to pay the $1.6-billion transition fund back to the federal government, the panel said it would also create a $531-million dent in the provincial budget.
However, Fight HST regional representative Eric Freeston says there is nothing unexpected in the report.
Freeston notes he's taking the report with guarded optimism in the sense that it has taken the time to state the obvious.
"We already knew it was going to cost B.C. families more money. We said the HST wasn't going to create more than 100,000 jobs and the report bears this out. The panel also points out there is a tax shift from the corporation to the taxpayers and that's what we've been saying all along."
They are stating this stuff so it looks like it's an unbiased panel, Freeston says, but those were obvious.
"From the beginning, I've said the panel is pro-HST and they end the report with scare tactics about going back to the PST/GST system, stating we're going to lose investment from corporations.
"It makes me wonder how did we ever grow the economy of the province in all those decades we were under the old system. Now, we're being told we're going to lose all that because of the old system ... it's all smoke and mirrors as far as I'm concerned."
If the HST were to remain, Freeston says he would like to see the provincial government mandate that corporations would have to take those savings and invest them into the province, create the jobs, raise the wages and make the products cheaper.
"If they had made that mandatory in order to benefit from the savings of the HST, I don't even think we would be having this conversation because we'd be getting the bang for our buck.
"But, right now, there's no accountability to take these savings and not go over to China where labour is a lot cheaper."
