The defeat of the HST Friday doesn’t change one fact about B.C.’s finances: We’re still spending more money than we are bringing in.
The HST hoped to address that. Not necessarily by increasing the amount of tax British Columbians pay, but by improving the economy by streamlining a clumsy and archaic provincial sales tax. A more active economy, the government contended, would mean more tax revenue coming in.
That argument failed to sway many. It was lost amid the shouts and accusations over the way the HST was introduced, and suspicion it would only benefit business.
Chilliwack MLA Barry Penner aptly called Friday’s referendum defeat a “self-inflicted wound.”
Indeed, the way the Liberals handled the HST should offer a textbook example to future politicians on how not to introduce a tax.
So deep was the anger that almost every economist and business leader failed to convince the public that tossing out the PST would enhance economic activity.
Even the promise to reduce the tax was seen as a crass attempt to buy the public’s favour.
So what now?
If there is one consensus that can be drawn from the last few months it is that the PST is a deeply flawed tax. Business people, politicians and economists agree that because of the way it is applied, it stifles growth.
The other reality is that the things we want our government to pay for – health care, education, transportation – all continue to cost more.
Our options are simple: Spend less, or find ways to generate additional revenue.
Premier Christy Clark has promised a Plan B. Let’s hope that plan involves a thorough and transparent discussion about ways we can improve our tax structure.
If the PST is flawed, Friday’s HST defeat should not preclude our changing it.
But let’s talk about it first.