August 27, 2009
Since the new tax was announced July 22, neither the Harper nor Campbell governments has demonstrated due accountability.
Three Conservative MPs have come forward to disavow Ottawa from any role in B.C.'s HST adoption while provincial Finance Minister Colin Hansen has played dumb.
Federal Finance Minister Jim Flaherty, instead of visiting B.C. to sell the tax, has kept a low profile.
Let's be clear. Ottawa has been actively lobbying all provinces to adopt the HST since 1996, when New Brunswick, Nova Scotia and Newfoundland signed on.
Reasons exist that make the HST a beneficial policy, not the least of which is that it puts more cash in the hands of business, which in turn tends to boost private-sector investment to hike productivity. Low productivity has long been one of Canada's biggest challenges.
Like his predecessors, Flaherty has been urging provinces to harmonize, offering cash inducements.
Ontario announced a buy-in in its March 26 budget.
That "changed everything for us," Hansen writes on his Facebook page.
Two weeks after the Campbell government's re-election in mid-May, the province launched its own harmonization talks with Ottawa.
Now you'd think Hansen would have told voters about the HST during the campaign.
After all, campaigns are the venue for such policy discussions. In past elections, tax changes have played a significant role, often resulting in defeat of the politicians proposing them.
Elections thereby act as a check on politicians, preventing them from riding roughshod over voters.
Canadians defeated Brian Mulroney after he introduced the GST. They cut short Joe Clark's Conservative leadership when he proposed an 18-cent-a-gallon gas tax.
They decimated Liberal leader Stephane Dion for proposing a carbon tax in last fall's election.
But Hansen, whose nose has grown considerably of late, says he didn't mention his HST proposal during the campaign because he was unaware of the Ontario budget measure.
Through all of April presumably, and into May, he was unaware.
"After the election, I was able to 're-engage' with finance ministry staff," explains Hansen. "At that time, it became obvious that some key issues had changed dramatically [including, in this context, the HST world]."
If Hansen indeed was oblivious to Ontario's actions for more than a month, campaign or no campaign, British Columbians have good reason to question his fitness as finance minister. It's a minimum responsibility of finance ministers to be up to the minute on Canadian policies that threaten to impact their own jurisdiction's competitiveness.
Hansen's claim of ignorance is not terribly credible -- but it was politically expedient; the B.C. Liberals were loath to face an almost-certain ballot-box repudiation by voters on the issue.
But that's precisely the way our democracy is designed to work. The onus on the campaigning Liberals was either to sell the policy to voters, modify it so it became minimally palatable or drop it.
The province's actions are certain to yield a loss of trust in the Campbell government, a loss that will challenge its future legitimacy.
Ottawa has been equally coy, adopting a hear-see-and-do-no-evil posture.
In a letter to a local newspaper, the Conservative MP for Nanaimo-Alberni, James Lunney, wrote that the HST decision was entirely a provincial one and concerns should be directed to local MLA Ron Cantelon.
Similarly, Dick Harris (Cariboo-Prince George) and Ontario MP Larry Miller, two other Conservatives, have disavowed Ottawa's role in convincing Ontario and B.C. to move to a harmonized sales tax.
A B.C. HST, at 12 per cent and applying to more items than are currently taxed provincially, is -- in macro-economic terms -- a good fiscal measure. But it's a hard sell to consumers already facing the highest housing costs in Canada.
The way it is being introduced in B.C. is an absolute disgrace.