The demise of B.C.'s harmonized sales tax would likely also kill the prospect of a fall election Premier Christy Clark is considering to secure her own mandate, observers say.
"If this is defeated, clearly the discussion in her caucus will be, 'Cool it with an election this fall. Let's not try to have an election so soon after this setback,' " said Michael Prince, a social policy professor at the University of Victoria.
The B.C. Liberals would then have to regroup to show they are in charge and controlling policy direction in the post-HST reality, he suggested.
Pollster Mario Canseco of Angus Reid Public Opinion noted that the defeat of the tax would be a boon for rookie NDP Leader Adrian Dix, who has forcefully campaigned against it, likely leading to a pause in the march to calling a general election.
"Calling an election right after a referendum of this magnitude, especially if it's lost, would probably not be the best course of action. Your rivals are going to be celebrating a victory," said Mr. Canseco, who noted the vote is too close to predict.
Results of an unprecedented referendum on the fate of the tax will be revealed Friday by Elections B.C., which has been tallying the ballots of about 1.6 million voters – 52 per cent of registered B.C. voters – who participated in the mail-in vote.
The ballot question was as follows: Are you in favour of extinguishing the HST (harmonized sales tax) and reinstating the PST (provincial sales tax) in conjunction with the GST (goods and services tax)?
To kill the tax, voters have to vote Yes. To save it, they have to vote No.
Supporters of the tax argued, among other things, that the HST was good for small business and maintaining jobs. Detractors said, among other things, that the tax forces middle- and lower-income people to pay more of their income for goods and services than those with higher incomes.
The B.C. Liberals, under former premier Gordon Campbell, proposed the 12-per-cent tax – an amalgamation of the 5-per-cent federal goods and services tax and 7-per-cent provincial sales tax – in 2009. The tax was enacted last year.
The HST was greeted by a storm of protest, especially as the Liberals had been lukewarm about the idea before the 2009 election that secured them their third straight mandate.
For his part, Prof. Prince said he expected the tax to survive the vote. That outcome, he said, would a setback for Mr. Dix due to the "political capital" he has invested in making the case to vote against the tax.
Under legislation setting out fixed election dates, the next B.C. election is scheduled for May, 2013.
Earlier this week, however, Ms. Clark said government had a "responsibility" to be ready for an election, and was acting on that view. "You can never, never be too ready," she said.
But Ms. Clark also noted that her government has a "Plan B" ready to roll out if the tax is defeated.
"Whatever instruction the people of British Columbia give us, we're going to carry it out," she said. "We've done a lot thinking about our Plan B, and we've given it a great deal of effort knowing it may not be necessary, but it's be better to prepared than not.
"I know what Plan B would look like if the HST is rejected."
Among other things, the B.C. Liberals would have to deal with a $3-billion budget hit that would include repaying $1.6-billion in transition funding from Ottawa.
Jock Finlayson, executive policy vice-president of the Business Council of British Columbia, said it is his impression that the government is ready to react to the demise of the HST. "I think a lot of people in government expect that [the HST] will be defeated and they are preparing for that eventuality," he said.
He said the council is hoping for the survival of the tax, which has been popular with the business community.
Still, he said his organization has two press releases ready to go on the outcome. "I have always been of the view that the odds did not favour retaining the HST," he said.
Ian Bailey