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HST unlikely to survive referendum even though bitter anger has faded - opinion polls suggest public opposition to the once-hated tax is dropping

Author: 2011/01/27
By Vaughn Palmer, Vancouver Sun 
 
As a dutiful B.C. Liberal member of the legislature, Ralph Sultan made every effort last spring to communicate with constituents and answer their concerns about the harmonized sales tax.

 

Sultan figures he sent out 5,000 missives of one kind or another, ranging from letters, to phone calls, to old-fashioned personal handwritten notes. He was well-equipped to make the pitch on behalf of the HST.

 

As a Harvard-educated economist, Sultan was entirely conversant with the professional consensus in favour of value-added taxation in general and a single federal-provincial sales tax regime in particular. As a former mining company executive, he also knew how the tax input credits would cut costs for the export industries, encouraging investment and growth.

 

Plus his was one of the safest B.C. Liberal seats in the legislature. Sultan's West Vancouver-Capilano constituents have elected him to three successive terms with better than two-thirds of the popular vote.

 

But none of that -- the expertise, his proven record with the electorate, not even his diligence in trying to answer every question that came his way -- was much help when he took up the cause of the HST.

 

"It was dreadful," Sultan told broadcaster Bill Good during an interview on radio station CKNW this week.

 

"The more I tried to explain it, the worse it got."

 

People were angry to the point of deafness. They simply didn't want to hear his explanations. So he gave up.

 

"I decided, finally, I had only one thing to do and that was to leave town."

 

He took a holiday in Sweden, where, as it happens, the HST-equivalent runs to 25 per cent, albeit neatly hidden in the price of goods, as is the case for most places with a value-added tax.

 

But that was six months ago, at the height of the rage over the much-hated tax. Today he finds the mail and the phone calls have dropped off almost completely. The HST is no longer even much of a talking point when he meets with constituents.

 

Partly because things are looking up for the economy in general. Partly because "the HST has not been the drag that the doom-and-gloom crowd portrayed it as being."

 

Sultan, in his current newsletter to constituents, cites the example of local restaurateur Peter Oates, proprietor of Carmelo's Italian restaurant in Ambleside. Oates was a prime doom-and-gloomer back in the early days of the HST. Stung by the comment from a business leader that "the sky hasn't fallen" in the first month under the HST, he fired back that for his business, the sky decidedly HAD fallen.

 

"July is the worst month I have seen -- $5,000 less than the previous worst experienced seven years earlier," the Carmelo's proprietor wrote in a letter published Aug. 7 in The Vancouver Sun. "I will do what it takes to continue to make my restaurant a going concern, but I see many restaurants that are not on firm ground going under."

 

But Sultan heard a dramatically different story when he paid a visit to the Ambleside eatery this month, and asked Oates how business is today.

 

"Wonderful," Oates replied. "Since last July we have never done better. December was a record month, up 20 per cent from a year ago."

 

The HST was no longer an issue. "The way it was introduced was poor. But now, we get more back on the tax credit compared to the old provincial sales tax. The average customer bill is up $2 per chair, and tip volume is as good as it ever was."

 

One report from the field does not a turnaround make. But there are other signs of a shift in favour of the tax.

 

Opinion polls suggest public opposition is dropping. The anti-HST-related recall campaign is faltering, too.

 

The Canadian Taxpayers Federation, normally no fan of taxes, this week launched a campaign to try to save the thing.

 

"It's no secret that the B.C. government botched the HST -- it cost the premier his job," said CTF-British Columbia director Gregory Thomas.

 

"But turning the clock back and reinstating the provincial sales tax is no solution ... The PST is a 63-year-old relic of the Stone Age. It's a regressive, job-killing tax. No modern province, state or country would ever create a tax as bad as the PST."

 

Sultan, having despaired last summer, is coming around to the idea that the tax might be saved.

 

"I think so -- the polling suggests there's a big [number] of undecideds out there."

 

But he acknowledges that there's still the matter of the referendum. One thing to say that people are learning to live with the tax, however grudging their acceptance. Quite another to expect them to cast a majority in favour of it in a provincewide vote set for Sept. 24. The Liberals are still wrestling with the solution to that conundrum. Bring forward the date for the vote?

 

Go to a mail-in ballot? Cut the tax by a point? Emphasize the cost of paying back $1.6 billion in federal transition funding?

 

Nobody knows what, if anything, will persuade people to vote to save a tax. As a result, though anger over the HST is fading, there's good reason to doubt that it can survive the referendum.

 

vpalmer@vancouversun



Read more: http://www.vancouversun.com/news/unlikely+survive+referendum+even+though+bitter+anger+faded/4175786/story.html#ixzz1CYyv3AgX

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