With HST makeover, B.C. Premier captures middle ground

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Premier Christy Clark has poached another one of the New Democratic Party's ideas with her "new improved HST" plan. The revamped tax package is geared toward saving the HST on the eve of a referendum, but she's framed it in a way that meets another objective: capturing B.C.'s political centre.

Her HST makeover introduced this week will hike corporate taxes to give families and seniors a break. It might - just might - be enough to persuade British Columbians to vote for keeping the tax. Failing that, Ms. Clark has still delivered a hard check to her political rival, Adrian Dix, whose economic platform includes a promise to increase corporate taxes.

If the HST survives this summer's vote, Ms. Clark has promised to hand out cash incentives to parents and seniors and to reduce the HST rate - and she'll pay for it by making businesses pick up a big share of the tab.

It really was just weeks ago that the B.C. Liberals were attacking Mr. Dix for proposing to roll back the last three rounds of the government's cuts to corporate income tax rates - exactly what Ms. Clark is now offering.

Mr. Dix was promising to raise business taxes to finance programs that would "reduce inequality." At the time, the B.C. Liberals called his plan "the leading edge of 18th-century socialism," an "eat the rich" scheme that would chase away jobs and investment.

Now, those same B.C. Liberals say raising the corporate income tax rate is an "honest rebalancing" between big business and consumers.

"The names they called me," Mr. Dix laughed on Wednesday after learning that he'd just lost another plank from his platform.

It's not the only NDP idea Ms. Clark has seized upon. In the space of two months, she has raised the minimum wage, restored funding cuts to charities, and even jumped on Mr. Dix's proposal to ban cosmetic pesticides.

Where has Mr. Dix to go, but further left? He was trying to convince voters this week that Ms. Clark's changes are only designed to help her corporate backers. "She speaks for a tiny elite," he said. "People should vote against the HST."

Pollster Mario Canseco of Angus Reid Public Opinion said the changes may not be blunt enough to alter the outcome for the HST, which still looks like it is heading for the junkyard.

But he said they do help Ms. Clark claim the political middle ground. "She's going to force the NDP way left," he predicted. From the night that she won the B.C. Liberal leadership, Ms. Clark has talked about battling poverty and helping families - sounding more like a New Democrat than a free enterpriser. Raising the minimum wage not only snatched a weapon away from the NDP, but it was one of those rare issues on which British Columbians agreed: 93 per cent of voters thought the minimum wage, frozen for 10 years, was too low.

But offering to raise corporate income taxes is not just a populist manoeuvre. It leaves Mr. Dix opposing a package of changes that he could have easily endorsed. Now he gets to explain why people should defeat the HST and go back to the old system, which would mean paying a higher combined PST and HST at the previous rates, while leaving corporate taxes where they are.

"It puts a lot of heat on the NDP," Mr. Canseco said.

The political contortions are amusing to watch, but voters are going to take away one of two things from this week's announcement. It is either: "The B.C. Liberals are trying to bribe us with our own money to accept a bad tax," or "The B.C. Liberals listened to us and they are reducing consumer costs."

If British Columbians reject the HST in the referendum, Ms. Clark will have a financial mess to deal with, but she may yet salvage something positive out of this for her team in preparing for the next provincial election.

Her government held telephone town halls that reached more British Columbians than any other provincial government consultation. Ms. Clark concluded that her predecessor, Gordon Campbell, went too far in helping corporations at the expense of consumers, and she tried to fix it. At least she will have demonstrated that she was willing to listen to voters.

What is funny is how close to the mark Mr. Dix and the NDP were in capturing the public's sentiments in the first place.

Cash incentives

If British Columbia's HST survives this summer's referendum, Premier Christy Clark is offering cash on the barrel to families and low-income seniors:

Who: 560,000 families with children, 200,000 single seniors and another 30,000 senior couples

How much: $175 per child under the age of 18, and a maximum of $175 each for seniors with low-to-modest incomes. It means about $140-million to families with kids, and $60-million to seniors.

When: The cheques will be mailed out after the referendum results, expected in August, are known. But the government has only promised that the cheques will be delivered before the end of the year. "There will be no holdup," Finance Minister Kevin Falcon said Thursday. "It would just be a question of processing time."