"YES" British Columbia Voters Have Their Say
The British Columbia voters have voted that the Harmonized Sales Tax ("HST") should end and the province should return to imposing a provincial sales tax. The referendum results show 54% "Yes" to vote out HST. In other words, the B.C. voters have told the government that they made a mistake in joining the harmonized provinces and they must correct their very costly mistake.
This referendum on tax policy is historic. The anti-HST group have successfully used the Recall and Initiative Act (British Columbia) to force a referendum on tax policy. This was a huge undertaking requiring 15% of registered voters in each riding to sign a petition in favour of holding a referendum. Over 700,000 people signed the petitions in British Columbia. Those signatures needed to be counted and verified. This was the first success as the hurdle to get to the referendum stage is high (almost, but not quite, insurmountable). Then the referendum resulted in 1.6 million votes being submitted before the deadline on August 5, 2011, which needed to be counted by Elections BC. Today, the outcome of the referendum is the key success. The people have successfully voted against the HST sales tax regime. The reasons for individual votes are varied. Many wanted to send the B.C. Campbell Government a message that they had made a big mistake and must fix the mistake regardless of the cost. Whether this is right or wrong can be debated by others.
The sun will set in British Columbia tonight and rise again tomorrow morning. The upcoming change in tax policy will not have radical effects. British Columbia will continue to be beautiful and destination for tourists. Businesses will continue to consider British Columbia to be a gateway to and from Asia. Businesses will open and close in British Columbia no differently than in Alberta, Saskatchewan, Manitoba, Prince Edward Island and the territories who have not harmonized their sales taxes (to the extent they impose a provincial sales tax). Life will go on and the various arguments raised in the referendum debate will fade away.
British Columbia will undoubtedly have budget issues to resolve in connection with the change to tax policy. The province was heading in the direction of the HST and now the direction should change in the direction of the previous sales tax regime. The people will be watching the Clark Government very closely looking for acceptance of the will of the people.
The discussion for days, months and years to come will focus on whether the Recall and Initiative Act should be amended to exclude tax policy. Should this historic event be repeatable in the area of tax policy? Does the successful use of the law highlight the flaws in the law? Should the law be fixed? There will always be a segment of society who are negatively affected by a change to tax policy. When asked whether they would like to pay more tax, people will instinctively say "NO". Is this the lesson to be learned today?
The United States debt debate foreshadows a future where people blessed by democracy will challenge government in terms of tax policy. The Tea Party's loud and clear message was "No new taxes". The British Columbia referendum results also are loud and clear.
Governments must listen to the electorate - that is the message that was received today. The question is: How can the Government listen better and move forward without the overuse of recall legislation in the future?
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
"When asked whether they would like to pay more tax, people will instinctively say "NO"."
I would just like to say that I for one would never say no before asking what the new tax was for and if I thought it was a legitimate and fair tax I would agree to it. Then again, I do believe in social responsibility and know that services cost money.
The point made in BC for me, is that we the lowly working class do not agree to less food and clothing for our families just so the largely multinational corporations that have outsourced most of our jobs can share the profit with their offshore shareholders. Maybe if these corps/companies would hire more local people to share the pain of taxation we would all be better off and I bet the economy would be booming here too.