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opinion

British Columbia Premier Gordon Campbell, right, applauds as Finance Minister Colin Hansen pauses while tabling the provincial budget at the B.C. Legislature in Victoria, B.C., on Tuesday March 2, 2010.DARRYL DYCK/The Canadian Press

While some people in the government of British Columbia were rightly considering possibilities for a harmonized sales tax, there is no evidence that the Liberals had a secret plan before the election of May, 2009, to spring the HST on an unsuspecting electorate.

A provincial finance department should always be considering tax policy options. But it was only in March, 2009 that rumours started to emerge from Ontario that the McGuinty government was actively considering the HST in that province. Very properly, civil servants in the B.C. Ministry of Finance wanted to keep an eye on any relevant dealings between the federal and the Ontario governments.

Glen Armstrong, the director of the B.C. ministry's tax policy branch, learned about the terms of the federal-Ontario HST agreement, and he appropriately let the Minister of Finance, Colin Hansen, know, by way of a briefing note, on March 26. Mr. Hansen's recent comment that he gave it at best a cursory glance is plausible enough. It did not seem urgent at the time.

In the election campaign, the Liberal Party answered a question sent to it by one business group, "A harmonized sales tax is not something that is contemplated in the B.C. Liberal platform, but we are committed to improving the tax system." Similarly, the party said it had "no plans to formally engage the federal government in discussions about potential harmonization."

Only after the election did it become clear to Mr. Hansen and to Gordon Campbell, the Premier, that it was now or never for accepting highly favourable terms - with timing to be co-ordinated with the introduction of the HST in Ontario - for the extension of the HST to B.C. For Ottawa - more particularly, for Jim Flaherty, the Minister of Finance, and his department - there was an economy of scale in bringing the HST to two of Canada's largest and most populous provinces at the same time.

A value-added tax, such as the GST and HST, was widely acknowledged to be good policy, better than an inconsistent provincial sales tax, but the transition would be difficult for the province. The federal incentives that were being offered made all the difference.

There have been many comments impugning Mr. Hansen's honesty. One from Carole James, the Leader of the Opposition, included this: "It's very clear it was on their radar screen."

A good government should indeed have far-seeing radar, that is, an awareness of eventual possibilities and the activities of neighbouring governments. The B.C. civil service was on the lookout, and the politicians made the right decision - for the HST - when the time came to make one.