The B.C. New Democrats have launched a campaign to encourage residents to vote Yes in a referendum that will ask them whether to get rid of the harmonized sales tax.
NDP Leader Adrian Dix said Tuesday the tax is a massive transfer of the tax burden from big business to middle-class families.
He noted the HST means hundreds of items and services that were once exempt from the provincial sales tax now include an extra 7-per-cent tax.
"Obviously, the B.C. Liberals have signed a terrible deal for British Columbia families," he said.
British Columbians will vote on the tax in a mail-in ballot to be delivered before the end of the month, asking the question "Are you in favour of extinguishing the HST and reinstating the PST in conjunction with the GST."
The federal government gave the B.C. government $1.-billion to transition into the tax, and if the tax is rejected by B.C. voters, it will have to be refunded.
But Mr. Dix said that payout is much less than the burden being placed on B.C. families every year, at about $1.9-billion more in taxes.
An independent panel appointed to assess the tax said the amount was $1.3-billion more for provincial taxpayers.
"Whatever the amount is," Mr. Dix said, "that's the amount extra that working families have to pay every year because of the HST."
In response, B.C. Finance Minister Kevin Falcon said Mr. Dix is flat out wrong, because the government is moving the HST down to 10 per cent.
"Every family at every income level is better off under a 10-per-cent HST than they are under a 12-per-cent PST and GST - to the tune of $120."
If voters reject the HST, the province would revert back to the old system, in which the federal GST and the provincial sales tax were each administered separately.
Some of the things that cost more now with the HST include phone service, hydro and heating bills, art, dance and sports lessons and gym memberships.
Mr. Falcon couldn't promise those items wouldn't be taxed under the provincial sales tax if voters told the government to go dump the HST.
He said he would need to ask the public how it would deal with the $3-billion hole in the B.C. government's fiscal plan.
"I need to know if they want the PST as it was and go into a bigger deficit or would they like us to expand it to cover new areas or do they want us to look at other taxes," he said.
Mr. Dix said the suggestion that the province isn't capable of moving back to the old provincial sales tax is wrong.
"And by the way, the B.C. Liberal party also opposed harmonization until the day after the last election … [because]it expanded the tax base on to families."
He said there would be some short-term implications for business going back to the provincial sales tax and government would need to lend some help to those businesses.
In an effort to have residents approve the controversial tax, Premier Christy Clark announced last month her government plans to reduce the HST from 12 per cent to 10 per cent.
Families with children and lower-income seniors would also get one-time transitional cheques of $175.
The government would pay for the tax changes by cancelling a corporate income tax cut planned for next January and postponing a small business tax decrease planned for next April.
The Canadian Press
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