HST rejected by B.C. voters

The B.C. government is getting to work dismantling the harmonized sales tax, a job that may take more than a year and add billions to the province's deficit.

Finance Minister Kevin Falcon explains steps to return B.C.'s provincial sales tax over the next year and a half.

The B.C. government is getting to work dismantling the harmonized sales tax, a job that may take more than a year and add billions to the province’s deficit.

The HST was rejected by 54.73 per cent of eligible voters, Elections BC reported. The government has promised to abide by a simple majority of voters.

Premier Christy Clark vowed that the former provincial sales tax will be reinstated with the same exemptions that existed before July 2010. That means restaurant meals, haircuts and a variety of services will only be subject to the five-per-cent federal goods and services tax, but the transition is expected to take a year and a half.

Referendum voting by constituency shows a split mainly along party lines. The strongest vote against the HST was more than 75 per cent in the NDP-held Surrey-Green Timbers and more than 72 per cent in Vancouver-Kingsway, the home constituency of NDP leader Adrian Dix.

A narrow majority of voters supported the tax in Abbotsford, Fort Langley-Aldergrove, Oak Bay-Gordon Head, Westside-Kelowna and other seats held by the B.C. Liberals. The strongest support for the HST was more than 64 per cent in West Vancouver-Capilano and 62 per cent in Vancouver-Quilchena, the seat held by Colin Hansen, the former finance minister who introduced the tax in 2009.

A smiling Dix welcomed the result Friday as a win for democracy. He said the B.C. economy has performed well for decades with a retail provincial sales tax and he is confident it can do so again.

Former premier Bill Vander Zalm told CBC television he is relieved that his two-year effort to kill the HST has succeeded. He said he will be watching to see if the government introduces any other tax measures to recoup the revenue lost due to B.C. and Canada’s first-ever successful initiative vote.

Finance Minister Kevin Falcon has estimated that scrapping the HST will cost the province about $3 billion in the next few years. The B.C. government will have to borrow to pay back the $1.6 billion transition fund from the federal government, with a payment schedule that will have to be negotiated with Ottawa.

Falcon said there will be pressure on B.C. to contain spending, but he intends to meet his target of returning to a balanced budget by 2013-14.

The finance ministry projected that the HST would bring in an additional $600 million in revenues in each of the next two years, based on economic growth and extending the seven-per-cent provincial portion of the sales tax to a variety of services.

Another cost to the provincial budget will be re-establishing a provincial sales tax administration and audit department. About 300 provincial tax collectors were transferred to the federal payroll when the HST took effect in July 2010.

Businesses will have to forgo input tax credits available under the HST, and convert cash registers and accounting systems back to collecting the GST and PST separately.

The B.C. government finished the 2010-11 fiscal year with a deficit of $309 million. Revenues for the year included the second instalment of the federal HST transition fund.

Just Posted

New surcharge for Harrison boaters

Small boat launch surcharge to fund KHSAR

POLL: How should Harrison deal with goose poop?

Monday’s council meeting raised questions about the best way to handle waste around the beach

Sts’ailes First Nation to vote on land code

Land Code would remove nation from 34 sections of Indian Act

KPU campuses go smoke-free starting Jan. 21 – and that includes vaping

‘We didn’t make this decision lightly’ says prez of the Surrey-based institution

Trial begins for man charged with 2010 murder of Mandy Johnson

Langley single mom was fatally shot while in vehicle in Abbotsford

Find Your Fit tour comes to Agassiz

Gives students hands-on experience with career-planning tools

WestJet appeals lost bid to scrap harassment lawsuit

Airline argues judge was wrong to have dismissed the company’s application to strike the legal action

Can U.S. border guards search your phone? Yes, and here’s how

Secretary of homeland security explains a new policy that let’s border guards check phones

‘Beautiful writer’ Nancy Richler dies of cancer in Vancouver hospital

Montreal-born author spent most of her adult life in B.C. as a fiction writer and novelist

B.C. commuters vote to rename bus service to ‘Jeff’

The company asked and the people of Facebook answered

Students frustrated by UBCO response to harassment allegations

Students on the Kelowna campus were unaware of resources and worried about lack of communication

Women’s March Canada Fraser Valley slated for Saturday morning

It’s a march for women’s rights and social justice for the most marginalized

Police investigate sexual assault of teen girl on Abbotsford school grounds

Incident occurred Wednesday night on elementary school grounds

White Rock plans to effectively ban legal pot dispensaries

Opponent says the plan is inspired by ‘a real right-wing mentality’

Most Read