Byelection over; now it’s down to business

Premier Christy Clark did a lot of nail-biting last Wednesday as the votes in the Vancouver-Point Grey byelection were being counted. For most of that evening NDP challenger David Eby was ahead and she must have been second-guessing her strategy of ducking those all-candidates debates.

But when the dust settled, Clark scraped ahead by the seat of her pants with 7,371 votes for a 48.92 per cent share of votes cast. Eby came in a squeaky close second with 6,776 votes for 44.97 per cent of the vote. With just 595 votes separating them, it was a huge score for the NDP who, seemingly revitalized, can’t wait to come back for more in a provincial election.

Clark, quick to point out that it was the first time in 30 years that a sitting government had won a byelection, must read that narrow victory margin as a head’s up that her re-election in the same riding will not be a done deal when a provincial election comes around later this year.

But before that, the Liberals have got to wade through the self-styled quicksand of the HST referendum.

The recent independent report chaired by Jim Dinning and titled ‘HST or PST/GST? It’s Your Decision’ has got to have them rattled. Fair and balanced, it came out showing that at the family level the HST digs into the wallet deeper but long term the harmonized tax is a big pay-off for the B.C. economy.

Because more things are taxed than before, families pay a total of $1.33 billion more in sales tax after HST rebates and tax breaks. The average family now pays $350 more in sales tax which is given back through increased tax exemptions and rebate cheques.

In the long run, the panel’s analysis shows that the real benefits of the HST are gradual and long term. They concluded that the economy will get a bigger boost under the HST than it would under the old system. By 2020 they estimate the economy will be $2.5 billion larger than it would have been with the GST/PST, representing a 1.1 per cent higher growth.

The panel’s analysis expects a four per cent boost in investment in machinery and equipment, a $1.2 billion boost in additional exports (about 1.2 per cent higher than under the GST/PST) and 24,400 more jobs than under the old system representing a one per cent increase in total employment. Businesses are expected to save at least $150 million in administrative costs because they now comply with one tax, not two, a saving that should be passed on to the consumer.

In the final lead-up to the referendum which will be conducted by a mail-in ballot June 13th to July 22nd, the government is spending another $5 million to inform people about the HST. This debacle has been going on for two years now and most people have it figured out. What needs to be better understood are the consequences of voting it down

It would be monumentally expensive to try to return to the old GST/PST system. It would take two years, money advanced from the feds would have to be repaid and the province would lose all the long term economic benefits not to mention the number one priority, stability, demanded by investors. And at the end of the day we would still be taxed at the same rates (5 per cent GST, 7 per cent PST) although Clark has the option to lower the PST portion a point, a cost to the coffers of $800 million but maybe a goodwill pay-off.

Clark has some tough work ahead of her now that her leadership honeymoon is truly over.

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