B.C.’s HST becomes a federal election issue

New Democratic Leader Jack Layton has promised to scrap B.C.’s HST agreement and allow the province to keep $1.6 billion it accepted from the federal government to implement the tax – if voters reject it in the coming referendum.

New Democratic Leader Jack Layton has promised to scrap B.C.’s HST agreement and allow the province to keep $1.6 billion it accepted from the federal government to implement the tax – if voters reject it in the coming referendum.

But Mark Strahl, the Conservative candidate in Chilliwack-Fraser Canyon, called Layton’s announcement a “hypocritical” move that drags a provincial issue into a federal election.

“They’re trying to ride the anger on the HST to their advantage, but voters know, when it comes to the NDP, they’re a high tax party which voted against any measures to lower taxes,” he said.

But Gwen O’Mahony, the NDP candidate in the riding, said what Layton has done is remove the “fear factor” from the HST referendum, and “moved toward protecting B.C. during this fragile (economic) time.”

“People who don’t like the tax were fearful of voting against it,” she said, because of the $1.6 billion repayment that would result from axing the tax.

As for mixing provincial and federal politics, O’Mahony said Chilliwack MLA John Les has been making speeches during the federal election campaign, warning about the dire consequences of voting against the HST in the June 24 referendum.

She said the HST is a “huge” issue among voters she meets during her door-knocking campaign in this riding.

“I hear it at the door,” she said. “People are still angry. It’s not over.”

Layton said in the announcement that only New Democratic MPs had voted against the harmonized sales tax in December, 2009, so “the only way British Columbians can … ensure fairness for B.C. is to vote New Democrat.”

But Strahl said it was the B.C. government’s choice to implement the tax and “they made their decision to switch to a harmonized sales tax.”

Other Canadian provinces have not switched to the HST, he said.

Les also called Layton’s announcement “a cheap political stunt” because the NDP Leader “is not going to be (elected) prime minister, and everybody knows that.”

Les said the $1.6 billion repayment, if the HST is rejected in the referendum, “is not fear-mongering, that’s just stating a fact.”

But former B.C. premier Bill Vander Zalm, who leads the fight in B.C. against the HST, said the B.C. government shouldn’t have to repay the $1.6 billion, “at least not all of it.”

First, he said, the federal government is collecting hundreds of millions of dollars “in extra taxes they never would have got from B.C.” because of the HST.

Secondly, he added, there is a provision in the agreement whereby the province can change the tax rate two years after its introduction – and if that rate is zero, the tax is effectively dead.

But Les called the zero tax rate idea “frivolous,” and said he was “disappointed” in Vander Zalm for making it.

“He ought to know in his heart it doesn’t make a whole lot of sense,” Les said.

“This referendum is about a serious choice people are going to have to make in a couple of months,” he said.

rfreeman@theprogress.com