First, Premier Gordon Campbell abruptly reversed a 15-per-cent income-tax cut that he had announced for Jan. 1.
Then, contenders to succeed him as premier held out the prospect of change in tax policy: Kevin Falcon has proposed freezing the carbon tax while Christy Clark has called for a free vote in the legislature on the wildly unpopular harmonized sales tax, a vote that would likely result in the death of the tax.
The New Democrats have now joined the fray, calling for the B.C. government to put the brakes on a corporate income-tax cut that comes into effect on Jan. 1.
"It's the wrong time to do it," said NDP finance critic Bruce Ralston. "It should not come into effect."
Similar to the introduction of the HST, the corporate income-tax cut reflects the approach of the B.C. Liberal government to shift the tax burden from businesses onto families, Mr. Ralston said in an interview. Government revenues should be put into transit or a climate-change initiative rather than a tax break, Mr. Ralston said, emphasizing party policy since the tax cut was announced.
He was also critical of the uncertainty about taxes in B.C. at the start of a new year. "It hardly sends a message of stability and continuity," he said.
Gregory Thomas, a director of the Canadian Taxpayers Federation, said the prospect of sudden reversals in tax policy may lead to people postponing decisions about doing business in B.C.
"Any time you have uncertainty and confusion over tax rates, it is not good for the economy, for business," he said.
The corporate income-tax rate is set to drop to 10 per cent on Jan. 1, from 10.5 per cent. With the reduced rate, B.C. will be tied with Alberta in having the lowest corporate income-tax rate in Canada. The tax cut will cost the province $90-million.
The corporate tax cut is part of a package of changes on Jan. 1 that include an increase in medical service plan premiums of about 6 per cent, a new northern and rural homeowner benefit of up to $200 and new property tax credits for farmland and industrial property.
Finance Minister Colin Hansen was on holidays and unavailable for an interview. Ida Chong, Minister of Regional Economic and Skills Development, said the cut in corporate taxes could give the provincial economy a boost.
"It is always significant whenever you have a tax cut," she said.
The tax cut is intended to help businesses who are looking to reinvest in new equipment or in their people, she also said.
"If that money is reinvested in equipment or [used to]train employees to be more productive, at the end of the day, it could generate significantly more [than the cost to the government of $90-million]" Ms. Chong said.
Some taxpayers may have been planning on the 15-per-cent cut in personal income tax, Ms. Chong said. "Another reduction would have been nice," she said. But the decision was made to let Mr. Campbell's successor shape tax policy, she said. B.C. continues to have the lowest personal income tax rate in Canada for those with an income up to $118,000, she added.
Ms. Chong defended the controversial 12-per-cent HST introduced last July, although she is facing a recall campaign as part of the backlash against the tax. Every independent economist has said the HST is going to be an advantage for the province, she said.
She also endorsed the hike in health-care premiums. The provincial health-care budget has almost doubled since the Liberals were first elected in 2001 but premiums have not, she said. The premiums are increasing this year at the same rate as spending on health-care costs, she added.
Mr. Thomas said the Canadian Taxpayers Federation would like to see a one-percentage-point drop in the HST. Business got a break with the introduction of HST, Mr. Thomas said. "It's not surprising that you have half-a-million people willing to protest."
The federation would also like to see those who wish to succeed Mr. Campbell as premier come up with substantive ideas on how to eliminate the current $1.7-billion deficit this year and balance the budget, Mr. Thomas also said.
The HST was introduced last July. The carbon tax has increased annually since its introduction in July, 2008. The tax on gas was set at 2.41 cents a litre in July, 2008 and was scheduled to increase to 7.24 cents a litre by July, 2012.