Would Ending HST in British Columbia Be Easy?
On August 29, 2010, CTV Calgary posted an article written by the Canadian Press entitled "Repealing HST possible; but expensive: expert". I, Cyndee Todgham Cherniak, was one of the experts quoted in the article.
I actually think that the expense of repealing/reversing/ending harmonized sales tax (HST) in British Columbia is somewhat overstated in the article. The federal government could treat any monies paid under the CITCA and amendment (less than $1 Billion at this time) as a pre-payment of other monies over as transfer payments. So, it is not that British Columbia would have to find approximately $1 Billion in the provincial bank account and write a big cheque. It may be that the Province would receive a smaller cheque from the Federal Government than what was hoped or expected as a transfer payment.
So, in a sense, ending HST in BC would be easy. But, that is too simplistic because businesses would be affected by the change. In the sense that businesses must implement changes in their record keeping to return to the previous sales tax regime, ending HST is not something that should occur overnight. It would not be wise to announce that HST is ending and BC social services tax is restarting - on the date of the announcement.
It would be wise for Premier Campbell to pick a date in the future that allows a reasonable adjustment time. That being said, if the B.C. Supreme Court issues its decision in the judicial review on the constitutionality of the implementation of HST in B.C. and finds that a required procedural step was not taken, the court would not be able to ignore its finding on unconstitutionality and grant the province authority to continue to permit the unconstitutional tax to be collected.
What this means is that the Premier is playing with fire by not settling the judicial review (so that a decision is not issued) and not agreeing to end HST. Premier Campbell could settle the judicial review and agree with the Petitioner for a reasonable time-table for the unwinding of HST in British Columbia. The Premier may also wait for the court's decision in the judicial review and, if unsuccessful, file an appeal. But, imaging what the people of British Columbia would say if the court says the HST is imposed unconstitutionally and the Premier does not look out for their interests?
I have said many times that what is happening in British Columbia will be in the history books someday. I just do not know what will be the story.
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
Interesting analysis of the HST situation. It sure doesn't help people who are trying toGet out of Debt and Keep it that Way">Get out of Debt and Keep it that Way.