HST horror stories fade away

The B.C. government has released its audited public accounts for what Bill Vander Zalm enthusiasts strain to depict as Year One of the Harmonized Sales Tax Apocalypse.

Bill Vander Zalm's dire predictions about the effects of the HST haven't come to pass.

Bill Vander Zalm's dire predictions about the effects of the HST haven't come to pass.

VICTORIA – The B.C. government has released its audited public accounts for what Bill Vander Zalm enthusiasts strain to depict as Year One of the Harmonized Sales Tax Apocalypse.

So let’s survey this allegedly bleak landscape of shuttered hair salons and seniors hoarding pet food, waiting for Belgian bureaucrats to come calling for more.

Retail sales increased 5.3 per cent in 2010. Growth has softened so far this year, but there’s no evidence it’s due to the HST. (Retail sales are mostly goods, which are mostly unaffected.)

B.C.’s economy grew by four per cent, third in Canada behind those new northern tigers Saskatchewan and Newfoundland. We beat Alberta as well as have-not Ontario.

The provincial deficit dropped by nearly a billion dollars, even though spending on government services continued its relentless rise with another billion-dollar increase. That’s four per cent spending growth, the same as the growth rate of the economy. But as usual, two thirds of it is health-care spending, growing closer to twice that fast.

Hair salons? My barber voted No to Vander Zalm. His accounting is simpler, his price is still reasonable and customers aren’t generally prepared to start cutting their own hair.

Restaurant association head Ian Tostenson predicted thousands of restaurants would close because of HST, and then mused about running for premier. Fortunately, we were spared from both of these scenarios.

Finance Minister Kevin Falcon put out some spin about how tight-fisted spending control brought the deficit down from the 10-figure range. Prudence, he called it. Prune juice is more like it.

It was economic growth that paid the bills, with mills and mines opening and consumers spending. Former premier Bill Bennett’s observation still applies: B.C. is a small, open resource economy in a volatile world market.

Commodity markets have strengthened to the point where even the rising Canadian dollar is being overcome. Expansion to Asia is proceeding, assisted by a long-term federal-provincial strategy that the NDP opposed. A skilled labour shortage already exists in the B.C. northeast and is forecast to spread across the province.

The government’s latest labour market survey estimates that B.C. will be in a labour shortage by 2016, and there will be one million job openings by 2020. One third of these will come from economic growth, two thirds from retiring baby boomers. Unlike next year’s HST revenues, this prediction is relatively easy to make with precision.

Job growth does depend, however, on a competitive tax environment, with competition from Ontario and elsewhere.

The public accounts also confirm what we found out last fall, that HST revenues have run ahead of expectations. HST haters like to claim the tax was promised to be revenue neutral. That finance ministry estimate was only for the first year, and it proved pessimistic. As with gasoline prices, external forces drown out B.C. tax adjustments in the short term.

Currently it looks as if going back to the old provincial sales tax will cost the treasury about $600 million in revenue in each of the next few years. HST rate cuts are made up by economic growth.

Or we can return to a 60-year-old retail sales tax developed for a post-war, pre-service economy, and continue a B.C. political debate that revolves around 30-year-old socialist ideology. The deficit will immediately jump back up to the 10-digit range.

So if your HST referendum envelope is still in the bottom of your recycling bin, you might consider fishing it out and casting a No vote. They have to be delivered to Elections BC by Aug. 5.

Tom Fletcher is legislative reporter and columnist for Black Press and BCLocalnews.com

Just Posted

Greater father involvement in the home leads to improved childhood development and increased marital satisfaction, says expert. (Black Press Media file photo)
University of Victoria researcher finds lack of father involvement a drag on gender equality

Working women still taking on most child and household duties in Canada

New COVID-19 cases on Vancouver Island by local health area for the week of June 6-12. (B.C. Centre for Disease Control image)
New COVID-19 cases up on Island, but health officials say trends going right way

There were 22 new COVID-19 cases in Greater Victoria last week after just four the week before

Emergency health services treated a person after they were blocking traffic at the intersection of Fort and Douglas Streets on June 17. (Evert Lindquist/ News Staff)
Victoria intersection traffic returns to normal after protester blocked roadway

A person in a motorized wheelchair was blocking the intersection at Fort and Douglas Streets

Eric White’s roadside farm stand in Metchosin sits stocked with produce. (Photo courtesy of Eric White)
Fledgling Metchosin farmer frustrated by thefts from stand

Eric White said every dollar made at the roadside helps sustain his farm

Saanich police took a suspect into custody after a store employee on Cedar Hill Cross Road was assaulted Wednesday afternoon. (Black Press Media file photo)
Employee assaulted at Saanich store after asking suspected shoplifters to leave

June 16 incident saw worker taken to hospital with non-life-threatening injuries

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

(Black Press Media file photo)
POLL: When was the last time you visited the mainland?

The films are again lighting the screens at local theatres, the wine… Continue reading

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of June 15

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

The Co-op gas station at Whiskey Creek is burning after a camper van exploded while refueling just before 4 p.m. on Thursday, June 17, 2021. (FACEBOOK PHOTO)
Exploding camper van torches Highway 4 gas station between Qualicum Beach and Port Alberni

Highway traffic blocked after Whiskey Creek gas station erupts into flames

Helen Austin performing with Trent Freeman at the 2018 Vancouver Island MusicFest. Austin is one of the many performers listed for the 2021 event.
Vancouver Island MusicFest goes virtual for 2021

Black Press to stream 25 hours of programming July 9-11

FILE – A science class at L.A. Matheson Secondary in Surrey, B.C. on March 12, 2021. (Lauren Collins/Surrey Now Leader)
Teachers’ union wants more COVID transmission data as B.C. prepares for back-to-school

BCTF says that details will be important as province works on plan for September

Provincial health officer Dr. Bonnie Henry outlines B.C.’s COVID-19 restart plan, May 25, 2021, including larger gatherings and a possible easing of mandatory masks on July 1. (B.C. government photo)
B.C. records 120 new COVID-19 cases, second vaccines accelerating

Lower Pfizer deliveries for early July, Moderna shipments up

A Heffley Creek peacock caught not one - but two - lifts on a logging truck this month. (Photo submitted)
Heffley Creek-area peacock hops logging trucks in search of love

Peacock hitched two lifts in the past month

The Calgary skyline is seen on Friday, Sept. 15, 2017. THE CANADIAN PRESS/Jeff McIntosh
2 deaths from COVID-19 Delta variant in Alberta, 1 patient was fully immunized

Kerry Williamson with Alberta Health Services says the patients likely acquired the virus in the hospital

Most Read