British Columbia Premier Gordon Campbell says the harmonized sales tax could eventually be raised beyond its planned 12 per cent to finance a cut in income taxes.
Mr. Campbell raised the option Tuesday, responding to government backbencher Terry Lake's suggestion this week that there is a tacit understanding the controversial tax will be cut in two years if the economy improves.
The Premier was dismissive of that possibility - "I haven't heard that" - but said there were other options.
"If Terry is saying there's a choice, he's right. There will be choices. You could choose to raise it and dramatically reduce income taxes. You could choose to reduce it. Those are choices any government will face."
Under its agreement with Ottawa, the B.C. government can adjust the HST rate as of 2012.
Finance Minister Colin Hansen said in an interview Tuesday that a cut in the HST would be an "option" if the economy improves. But he noted that each percentage point cut would drain $750-million from government revenues that would have to be covered either by cuts or revenues from other sources.
"Hopefully the economy will be recovering to the point that that would be an option that we could consider at that time. I can't predict what decisions cabinet might make at that time in terms of tax policy," he said.
Mr. Lake, MLA for Kamloops-North Thompson, is one of two MLAs vulnerable to recall campaigns to float proposals this week aimed at calming angry voters. Donna Barnett of Cariboo-Chilcotin suggested a referendum on the tax.
Mr. Campbell said both are strongly behind the government, and noted Ms. Barnett was simply acknowledging one possibility ahead as the select standing committee on legislative initiatives prepares to deal with anti-HST petitions once they are validated by Elections BC.
"She favours a referendum? She'll get to voice that with the committee and in the legislature," he said.
Mr. Campbell said his caucus is "upbeat" and understands there is a job ahead on the HST, which has been linked to declining support for the Liberal government and the Premier himself.
Mr. Campbell was otherwise occupied Tuesday as host of the first day of the 2010 Western Premiers Conference.
The Premier said the leaders agreed to measures to promote action on water quality and efficiency to lower water consumption through a public awareness campaign, product labeling to help Canadians choose low-water-use appliances like dishwashers and washing machines.
There will also be a bid to make the next World Water Day, scheduled for March 22, 2011, a national event to promote water conservation, Mr. Campbell said, speaking for the delegate leaders.
The leaders also called on federal and provincial agriculture ministers to discuss supports for faming communities hard hit by severe wet weather this spring.