"But we have a new Premier,"
On Wednesday, May 4th, the British Columbian Liberal Party held a ‘Telephone Town Hall’ meeting across the province. Pat Bell was the host of just one of several telephone conferences. He was joined by members of the Liberal Party across the province and in his office was Shirley Bond. The subject of the Town Hall meeting was the Harmonized Sales Tax.
The goal of the hour and a half phone call was receive information on how the government could improve the HST. The date for the referendum has been moved from September to June by BC Premier Christy Clark.
“We want to engage quickly with British Columbians to talk to them about the tax issue and how we can improve upon that. Frankly, we absolutely understand that we did a poor job of rolling out the HST, people were concerned. [The BC Liberals] all heard that from many of our constituents and although we tried to get to as many people as possible over the last year, we know we didn’t get to anyone which is why we decided to pursue this option with the telephone town halls. The referendum is right around the corner so it’s absolutely critical that we make sure that everyone has the facts and however you choose to vote, our goal is only to make sure that you have all of the information you need in order to make a good decision and a good decision for you,” said Bell.
Bell said this is not a sales pitch and there was no motivation to steer people in any direction. He simply wanted to provide information. He recommended people check the website www.hstinbc.ca
which has a question and answer section and a place where people put in their information to get a better sense of the impact on them and their family. Then there will be public dialogues on HST around the province at Universities and Colleges. Finally, there will be a voters guide going out to the people of BC in early June and a summary of an independent panel report.
He added a new report was released earlier that day, and read the last couple of paragraphs, which said the debate was filled with non factual information, they believed the referendum had to be filled with factual information, positive and negative, for it to be successful. The question British Columbians will answer is if they are in favour of removing the HST and replacing it with the GST / PST system, a yes or no answer.
The first question was asked while the questions were still being organized. It was why the province chose a mail in ballot for the referendum and when people could expect their ballot. Bell explained the reason they chose this was so everyone could get engaged in this process. People might not be able to get to a polling station during a one day referendum. Second, a mail in ballot creates an $18,000,000 difference. A referendum carries with it a $30,000,000 cost.
Bell said there were a couple of dates which needed to be kept in mind. June 24th is the date you should be worried if you have not received your ballot in the mail. He asked people who have not received their ballot to phone Elections BC immediately. The last day for Elections BC to receive the ballot is July 22nd.
Then the lines opened and the questions began.
Jim, who is on a fixed income, wanted to know how the HST would help the average person. Bell explained money was added to the HST rebate cheques and some of the cheques were directly deposited. This amount of money was $230 per person. He added the HST was contributing money to health care costs which were escalating at an alarming rate.
Monica said this seemed like a tax shift from business to individuals and if this was the reason they implemented it. “That is not the reason why we did it but what you said is a fact,” said Bell. He stated the report which was issued said consumers would pay around an additional 1.3 billion dollars annually and businesses would pay 700 million dollars less in tax. He said the success in reopening saw mills over the last year has been related to a more competitive tax environment.
“Right now lumber is selling for about $250 per 1000 board feet. A PST system and costs associated with that amounts to a significant component that is added on to that; potentially $5 or $7 per 1000 board feat in additional costs. In a good market, that’s not a problem, in a bad market, it means sawmills close and people are out of work,” said Bell, “The reason was not to displace money from taxpayers to businesses, it was to make sure we have competitive businesses which employ people and make sure we have a strong economy.”
Brent wanted to know if the government has been able to measure the growth in the economy because of the HST. Bell replied they were ten months into the HST and it was difficult to quantify the last 10 months. However, they reopened 24 saw mills in the 18 months he was forest minister. He said he did not wish to connect these re-openings to the HST but the HST did create a better investment climate. He added the report which came out indicated there was 1.2 billion dollars in exports from BC mining, forestry, film and energy. It translated into 24,400 direct jobs.
Other people offered suggestions for things not to be taxed. Robert and Tom wanted to know why sports equipment was being taxed. Diane and Margaret asked the government to make restaurants exempt. Gary asked about why there was HST on energy efficient items. Lori was concerned about the cost of health care going up via the HST in areas such as the chiropractor. Bell mentioned he was taking notes for recommendations for changes to the HST. He also added there were opportunities for people to make requests at www.hstinbc.ca
Steve asked about the price of children’s clothes and medication, both of which had the taxes paid on them increase by the HST. Bell pointed out HST was only on over the counter medication. He said voting down HST would restore the taxes on these items to their original level. There is no HST on groceries other then items such as a cooked chicken.
David, as an owner of a small business, said he did not have a problem with the HST but he thought it could be reduced to 10%. He also said the taxes should be included in the prices. Bell replied each percent is the equivalent of 800 million dollars. He expressed the pricing would require Federal approval. Shaun asked the same thing.
Jackie was the first person to ask what the government was doing to ensure the businesses passed on their savings from the HST to the consumer, using vehicle repairs as an example. Bell replied services, such as car repair, no longer pay PST on certain items so they should now be passing those savings to the consumer. In other provinces which have implemented the HST, the savings have not come back right away, but rather over a few years. He said British Columbians should already see the cost of food in restaurants going down.
One of the big questions of the night was about how much it was going to cost to reinstate the GST and PST. “The Federal Government provided us with 1.6 billion dollars as the transition fund. We inserted that into our budget over three years. That 1.6 billion dollars would clearly have to be paid back to the Federal Government. That’s our belief at this point. That’s adds about 80 to 85 million dollars a year interest costs to the province,” said Bell. “One of the other key costs of this is we would have to rebuild the department that would collect the PST. Our experience, that’s about 35 million dollars, in that range and then there is the cost of reassembling the processes.”
He added the duplication costs cost small businesses 150 million dollars each year. He said when he owned a small business, he did not want to provide duplicate information to two levels of government. He said voting down the HST would cost the government over $100 million dollars a year. He later upped this cost to half a billion dollars in short fall.
“The government will have to find that revenue, run a bigger deficit or cut programs, those are the choices,” said Bell.
Immediately after saying that, Janet came on the line asking how much they would have to pay back because of the agreement the BC government made with the Federal Government. Bell replied if any side were to break the agreement within five years of making it, they would be obligated to pay back the 1.6 billion dollars of transitional money. He pointed out the Provincial Budget is 42 million dollars to put the 1.6 billion dollars into perspective.
Russell asked how they would replace the shortfall or if they would have to cut back. “You are asking the question that we are asking ourselves right now. There is no magic place that we can get money from. The amount of money annually is half a billion dollars. That actually escalates over time but half a billion dollars initially. You really have three choices. You could increase taxes, you can increase the deficit or you can reduce services,” said Bell. He added none of those solutions were attractive. People rely on services, taxes make BC less competitive and he did not like the idea of passing the cost onto his kids.
John wanted to know what would happen to the price of home fuels and other fuels if people get rid of the HST. Bell said there would no HST on the home fuel today and no PST if they went back, the same cost.
Janet wondered why the BC Government needed this. She stated when Gordon Campbell said the HST was revenue neutral, not a word was said by any of the ministers. She pondered why they just realized now about people being furious about the way HST was handled and now they are taking people’s calls and none of them stood up to Campbell when he told people this was revenue neutral. Bell said there is a new Premier and she believes the government has to be more accountable, they came up short. He admitted they did a rotten job and they need to improve so they can represent their elected areas and BC. He added they generated more revenue than they thought they would. He concluded this was a great news story because there were 23,000 people on his call and a total of 78,000 on all the calls which were being made.
“I want to know who’s counting the ballots on this mail in referendum thing. Is it a done deal or are we just spinning our wheels and wasting more money?” asked Stan. Bell told him the entire process is being done by Elections BC. They are independent of government.
“When they brought in this HST, did it benefit the companies more then the taxpayers. It seems like the taxpayers are paying the burden. Another question I have, after all these polls which all the people signed to get this referendum back in line and you realize so many people dislike this and everyone in their riding, why would we even have to go to this mail in referendum when you could have just stood up and said, ‘well all the people spoke in my area and they said no so I have to say no’ instead of being the ‘Bull in the China Shop’ and go along with party lines. It makes me wonder why we vote you in but you don’t do what you’re voted in to do. You’re speaking according to what Campbell wants, not what the people who voted you in want.” asked Robert.
Bell replied there was a new Premier, Campbell resigned and they are focused on their bright future but they are confronted with what to do about the HST. He said there was no process more democratic than going to the people and asking them to make a decision. He added they went one step beyond the requirements for a referendum, rather then requiring 50% of the voters list, they require 50% of the people who vote.
Reg, a logger from Vanderhoof, asked why there was not a brochure to educate the public on the effect the HST has had on the public. Bell explained by buying a logging truck, he would receive a savings in what used to be PST because he would not have to pay it from the HST. Bell repeated the three locations he mentioned at the start of the call as places to get more information.
Throughout the evening, several people were cut off while they asked their questions such as Steven from Burns Lake
“I want to know why, you keep saying we have a new government, how come your new government doesn’t stand up and say, ‘Yes, we know there was a mistake made by the government from before, stand up and it is not going back, it is putting money back in my pocket because I’m disabled, every penny counts. Every penny counts and you’re taking more money out of my pocket. Big businesses have already raping us. You already sold our sawmills off to the United States. They are getting tax breaks in British Columbia and they’re ripping us off at the boarder for more taxes. Don’t go about saying this is all going backwards, the HST is putting us more in debt. Here is the other part with the debt. With the money you took from the Federal Government, gave you to make more money, taxes for the government as HST…” Bell explained he was being cut off for going into other issues above the HST. He hoped Steven was getting the maximum credit.
Ed stated as a carpenter, he has seen his business decline and he can see a trend about seeing how they are going to pay for the transition back to the PST / GST. He said the BC Liberals let down BC by failing to consult and forced to bear the burden of this mistake. He suggested they hold Campbell’s six figure pension.
He was cut short as he concluded his question and Bell stated he was writing down the questions. Bell pointed out if they had not gone to the HST, they would be 1.6 billion dollars further behind. He said the HST was an opportunity for the government to receive 1.6 billion dollars and if they did not have this money, they might have raised taxes or cut services anyway.
After this, callers were asked to keep their questions short and only ask one question per call.
The last question of the evening was also cut short. “I’m confused. You bring this in against everyone’s will and now you’re asking us if we still want it to the tune of millions of dollars. And then you’re going to print pamphlets to the tune of millions of dollars. I think you got people mad because of this type of thing. You put something through and then you go back and ask us later. This is the kind of thing that costs us, as tax payers, billions of dollars which you want to save…” said Michelle.
At this point, she was cut off because they were running short on time. Bell apologized stating he would like to hear the rest of her comments. “Your comments are the way many British Columbians feel actually. That’s why we’re here tonight,” said Bell. He reminded her they have a new Premier and she has mandated a strong agenda of change. He said this was the first time for British Columbia to host a ‘Telephone Town Hall’ meeting. He said they believe in listening to their constituents and acting responsibly. There were tough decisions to be made and the BC Liberals have learned that over the last couple of years. He said the decision was a huge decision which everyone had to make. He said they were going to listen and respond. If the people of BC want to go back to a PST system, this is what will be.
On this note, he ended the call. People were invited to stay on the line and leave a recorded message for the government.
This is not about taxation.