With Ontario embroiled in an election campaign that will be at least a partial test of voters’ attitudes toward the imposition of the harmonized sales tax, the recent lessons learned in British Columbia may be instructive.
In August, B.C.’s HST went down to a narrow referendum defeat. The tax, which had cost former premier Gordon Campbell his job, will now be ended, costing the province about $3 billion in administrative costs to reverse it and creating a host of headaches for consumers and businesses alike.
Ontario premier and fellow Liberal Dalton McGuinty may face similar headwinds, although both opposing parties in Ontario say they will keep the HST (with a couple of exceptions). As in B.C., the contest may be over the unilateral way the HST was imposed as much as about the tax itself.
Certainly, B.C. Liberals are still in shock over the defeat of B.C.’s HST in the special referendum on the issue. “The people won” was the way Opposition leader Adrian Dix of the New Democratic Party put it.
But former B.C. premier Bill Vander Zalm, who led the provincewide campaign opposing the new tax, was closer to the mark: “It sent a message to politicians. They can’t simply do things because it’s the will of the premier or the party.”
The HST’s introduction in B.C. in 2009 was definitely the will of the previous premier and the B.C. Liberal Party, which Campbell had ruled with an iron fist. After rejecting an HST for B.C. during the election that spring, a victorious Campbell quickly and unexpectedly introduced the new tax, which represented a major shift in the tax burden from business to consumers.
His move left many B.C. voters feeling they’d been lied to and blindsided by Campbell. The HST issue ultimately proved to be Campbell’s downfall and, in future, may go down as one of the biggest blunders in Canadian political history.
Perhaps in an attempt to appease his critics, Campbell also helped to set the stage for the mail-in referendum’s result, in which 54.7% favoured returning to the provincial sales tax that accompanied the federal goods and services tax. In September 2010 — after opponents garnered enough public support for an HST referendum — Campbell announced that his government would be bound by a simple majority on the vote rather than stick to a higher vote threshold as outlined in the Recall and Initiative Act. Had he not done this, the anti-HST referendum result announced on Aug. 26 may have failed.
The referendum result has forced Premier Christy Clark to abandon plans for a snap provincial election this fall. Instead, she’ll stick to the legislated date (May 14, 2013) for B.C.’s next election. Clark says the new date gives her government time to implement a new jobs and economic-development program.
The fact is, however, she needs the time between now and May 2013 to regain public trust in her party.
There’s no doubt whatsoever that had the HST been introduced differently, it may have survived. More important, the vote has sent a clear message to all politicians across Canada — don’t mislead voters. IE
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