New sales tax will harm, not harmonize

Columbia Valley Pioneer
September 25, 2009

Dear Editor:

I have recently received some emails from the Chamber of Commerce regarding the proposed Harmonized Sales Tax.

May I address the question these documents posed to their reader: “Without harmonization, these sectors (investment, export goods and natural resources) will be placed at such a disadvantage they will not survive.  How do you propose to make our economy competitive for investment?”

What an outdated, alarmist scare tactic.  Without the Harmonized Sales Tax (HST), these sectors certainly will survive and, if they don’t, then new or improved sectors better suited to the needs of British Columbians as a whole will evolve.  The heart of why the HST is being forced upon us is that the federal government is offering $1.6 billion to BC so they can create a more industrialized province out west.

The reason this is even being considered is because the current administration has made such a financial mess that this boost would make their figures look slightly less ridiculous.

The way this tax is supposed to help the average citizen is through a ‘value-added chain’.  This is an undeniable euphemism for the trickle-down effect.  The idea is that if huge corporations can create goods at a lower cost, they will pass them down the supply chain at a reduced cost. Realistically, the first thing that will happen if goods are cheaper is huge bonuses for company executives.

On the flip side, small service-based industries, the same ones that have helped BC stay afloat during tough times, will suffer immensely when people can’t afford seven percent more for their services and their employees are, sadly, sent away.

So how can we make ourselves more attractive for investment?  We can start with a better-run governing body to help us out of our deficit.  Also, foreign investment means that people from outside BC will profit from our work.  This is not necessarily a bad thing, as these investments do act as a stimulus for growth, but do not believe that investments are a magic end that will make all British Columbians wealthier.

It is also ridiculous to say that HST is going to help fixed-income and low-income homes.  Even if they are reimbursed quarterly, how are many struggling individuals going to keep track of this?  It simply will not happen, or will be estimated poorly.

Also, those who are truly experiencing hardship during this recession will be forced to take on more debt to cover the extra seven percent.  This means that even if they get their seven-percent HST back, they will still be sinking further into debt each quarter from interest charges.

Lastly, I would like to note that, even though an estimated 85 percent of British Columbians oppose HST, we will still likely see this quick fix disguised as a long-term solution forced on us as the law.  None of this extra money is going to be used to help our educational or health care systems and these sectors should certainly be more important than a new tax which ignores them completely.

Brandon Csokanay

Spur Valley