Big news out of Victoria and Ottawa today that the HST repayment terms have been agreed upon. The Government of British Columbia (that’s you and me, the taxpayers), will have five years, interest-free, to pay back the $1.6 billion transition bonus to the Government of Canada (also you and me, but in slightly more diluted form).

Canadian taxpayers could have held BC taxpayers over a barrel and demanded interest, but didn’t. This settlement seems very fair, but BC will still have to come up with $320 million a year for five years, plus the loss of revenue that going back to the PST will cause anyway. It’s a significant cost, but one the people of BC were prepared to swallow to get rid of the hated HST.

There has been some braying that BC shouldn’t have to pay anything. A few months ago, I blogged the following: 

As a provincial taxpayer, I’d be thrilled if the federal government simply forgave us the $1.6 billion. But as a federal taxpayer, I’d be furious if the federal government did the same for, say, Nova Scotia. One cannot hammer the federal government for paying out billions to provinces in one breath and then criticize them for NOT doing it with the other.

Democracy can be expensive. The HST referendum decision has shifted BC’s priorities, but that’s what the people wanted. We knew the costs going into the vote, and still made the decision to bring back the PST/GST. The rest of Canada shouldn’t be punished for our democratic choice, no matter how convenient it would be for us.

It’s a sentiment that I still hold, even today when the invoice has been received.

With this out of the way, hopefully the rest of the HST-to-PST transition rules get released sooner than later.