The first order of business this week in the B.C. legislature is a debate on Bill 2, the law to reinstate the provincial sales tax. It ensures that the Liberal government’s millstone that is the harmonized sales tax is finally lifted two weeks before the election campaign begins. It means the provincial sales tax, as in the past, won’t apply to items such as restaurant meals, movie tickets and haircuts. But Finance Minister Mike de Jong expects no chorus of angels to sing his praises – the Liberal government is only doing this because an angry public made it back down. And the main beneficiary of the HST, the business community, is cranky about the way it was brought back.
In the 1996 election, the NDP staged a campaign that painted the Liberals as the party of Howe Street – big business. The NDP, naturally, represented the good hard-working folks of Main Street. Since the Liberals took office in 2001, they have done a pretty good job of playing their assigned role. Until now.
The adoption of the HST was a shift of the tax burden from business to consumers. What is happening now as the B.C. Liberals prepare to face the electorate is a shift the other way. Ms. Clark said last week’s budget was “balanced in every sense of the word.” It included a raft of tax hikes for business and high-income earners – a reversal of 12 years of Liberal policy. The Liberals argue they have done enough to improve the investment climate with tax cuts over the years, and the folks on Howe Street can now afford to cough up a little more. But the complaints from industry about the Liberal government are mounting – perhaps the relationship has soured. “This is an inopportune time to be adding to the tax burden facing business and industry in British Columbia,” said Jock Finlayson, chief economist for the B.C. Business Council.
“There is nothing in here to address the competitive nature of our economy that will create the kind of growth that is needed to pay the bills,” said John Winter of the B.C. Chamber of Commerce.
And it is not just the PST and the budget. The oil and gas sector is unhappy with the threat to impose a new tax on the proposed liquefied natural gas industry. The film industry mounted a social-media attack on the Premier’s Facebook page in a bid for more tax credits. Catalyst Paper Corp. CEO Kevin Clarke gleefully posed with NDP Leader Adrian Dix at the Toronto Stock Exchange last month, after the Liberal government left the financially troubled company to flounder.
The mining sector is fuming about a decision by the Clark government to kill the proposed Morrison copper and gold mine. In a speech last week, the head of the Mining Association of Canada raked the Liberals over the coals: “How did the government come to the conclusion that the risks outweighed the benefits? Frankly, we don’t know. What we do know is this uncertainty is not good for investment.”
Even as the corporate community vents about the Clark government, business leaders are making an effort to blur the lines that defined election campaigns past.
Greg D’Avignon, president of the Business Council of B.C., is organizing a conference on how B.C. can do a better job at sharing the province’s wealth.
Mr. D’Avignon ran Gordon Campbell’s campaign in the last election. But now he wants to dial down the polarized rhetoric that is the hallmark of this province’s election campaigns.
“That family earning between $30,000 and $80,000 hasn’t felt like they have participated in economic prosperity in the last little while,” he said in an interview. “How can we share that prosperity in a more meaningful way?”
The case for shared prosperity echoes the arguments advanced by Don Wright, the former head of the B.C. Institute of Technology who has recently quit to help the NDP prepare for a possible transition to government.
With all this muddy crossover, the script for the 2013 election campaign cannot be a battle between Howe Street and Main Street.