It will take a very long time or a political party with very thick skin and plenty of clout to bring the harmonized sales tax back onto the political agenda in B.C., tax experts and political insiders say.
On April 1, B.C. will revert to a two-tiered tax system as the provincial sales tax returns, replacing the HST that blended the PST with the federal goods and services tax.
While lauded by economists as a progressive tax measure and embraced by manufacturers and big business as a competitive advantage for B.C., the HST appears to be dead and buried.
“Right now, I don’t think any government would touch it with a 10-foot pole. I honestly don’t think we will revisit it for a long time,” said Herbert Schuetze, an economics professor at the University of Victoria.
“There were definitely some real advantages to the HST. It was unfortunate the way it was politically motivated and implemented.”
The HST was never a hit with consumers. Many were upset it was introduced without warning. It was killed by a referendum in 2011, just 13 months after its introduction.
The tax also played a role in cutting short the political careers of then premier Gordon Campbell and then finance minister Colin Hansen, and damaged support for the governing Liberal party.
Forget about the HST for 10 years, said Norman Ruff, UVic professor emeritus of political science.
“It seems extremely unlikely over the next decade, but nothing is inevitable, especially in B.C. politics,” he said. “Persistent economic reasoning in favour of harmonization could well propel an attempted return.”
But Ruff said any conversation would require far more public participation.
“Maybe after two election cycles down the road, British Columbians might be more open-minded by, say, 2021,” he said.
But for those without that kind of patience for a better tax system, there may be some political will to tweak and improve the existing PST.
Naomi Yamamoto, minister of state for small business, said the referendum meant the government was tied to restoring the PST to the way it was. However, the government made administrative changes in the legislation to streamline the process for business.
The measures include having businesses register, update accounts and pay their PST online; synchronizing the date for tax remittance with the GST to the last day of the month; and incorporating the hotel room tax into the PST.
More changes could come after April 1, said Yamamoto, a former small-business owner. “It doesn’t mean after we return to the PST — the two-tax system — that we can’t look at streamlining it again.”
Darlene Hollstein, chairwoman of the Greater Victoria Chamber of Commerce, certainly hopes so.
“The switch to the PST is a win for some industries but a loss to a lot, and I suspect at some point there will be a will to [return to HST] again when people realize we are not as competitive as we could be,” she said.
“I’m really hoping we look at it again. It’s frustrating to make some headway and then have to go back to an old system.”
© Copyright 2013
