B.C. Referendum Is Around The Corner & Polls Say "Bye Bye HST in B.C."

Posted on June 13, 2011 by Cyndee Todgham Cherniak

The Globe & Mail is reporting in an article entitled "B.C. HST 'fix' not enough to save tax in referendum: poll" that an Ipsos-Reid poll released June 12, 2011 says 54% of decided voters will vote against keeping the HST in British Columbia.

If British Columbia backs out of the Comprehensive Integrated Tax Coordination Agreement with the federal government, there will be consequences under that agreement.  Most importantly, British Columbia will have to pay back the two installments (will be three installments are July 1, 2011) of the implementation monies. Businesses will have to change their tax systems again -- to what? It is too soon to tell.

Will B.C. walk away from HST?  We will have to watch for the referendum results.  Could B.C. use the referendum results to negotiate a better HST deal with Ottawa? Maybe (I would try that).  Could B.C. convince the people to accept a revised HST deal after the referendum?  That one will be tricky.  Will a "NO HST" referendum result complicate things for B.C. businesses? Yes - and that is why businesses are coming out in support of HST.

Will B.C. revert back to the social services tax regime?  I am not sure.  However, if I was to bet on an outcome ... it would be that if the "No" vote succeeds, the B.C. government would back out of the HST (the federal sale tax regime under the Excise Tax Act).  The B.C. government would implement the British Columbia sales tax (BCST) under B.C. law that looks a lot like HST (similar to Quebec sales tax in Quebec). British Columbia would enter into an agreement with the federal government to administer BCST (just like with HST).  In other words, things would remain pretty much the same for consumers and businesses.  The difference would be with coordination of changes (just like in Quebec).

I have not talked with anyone in British Columbia about this and do not know what are the actual plans.  What I have written is a guess and nothing more.  Time will tell if it is a good guess.

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