Colin Hansen boasts that he and his wife ran a small business prior to his entry into politics in 1995. Perhaps his absence from business for so long has warped his view of the negative impact the HST will have on a host of small businesses.
One would think that the Finance Minister, who held “private” meetings with various stakeholders, would have a better idea. Perhaps he has given concessions to the important political supporters such as the home builders where he agreed to raise the threshold for new homes subject to additional tax to those priced at $525,000. Clearly he knows that the HST will negatively impact home construction projects. That is why he tried to cut a deal with builders to get their support.
Similarly, the Victoria Chamber of Commerce advocated on behalf of the Council of Tourism Associations to bring in mitigation strategies to off-set negative impacts from the HST for tourist operators on Vancouver Island. A strong representation to the Minister of Finance was made along with recommendations such as a change in the transitional rules allowing that fixed-price contracts in the tourism industry not be subject to self assessment in the 2010 calendar year to provide relief for the hundreds of tourism related businesses who managed to stave off bankruptcy in the wake of the 2008/09 economic meltdown. Clearly, such a request would not be necessary if the HST was as good for business as Mr. Hansen contends it is.
Further, the HST will increase the cost of Ferry service to ferry dependent communities. While the fares themselves are HST exempt, B.C. Ferries is unable to claim back their increased HST expenses through input tax credits.
The B.C. Ferry Corporation estimates that the HST will require roughly $6 million annually to be passed on as a cost to the ferry users. That will have to be recovered through additional increases to ferry fares. They have already gone up by over 100% on some routes since the Campbell government has come to office.
Ferry fares directly impact the cost of doing business in every community that is dependent upon them. I suppose that Mr. Hansen’s response will be to look to private barge operators who are able to recover those costs to transport commodities, which is typical of the short sighted, poor economics practiced by this government. By removing commercial users from the BC Ferry service, it will further reduce revenues to the Corporation which will require it to recover the loss through higher fees for those consumers who have no choice in terms of their travel options.
Maybe, our Finance Minister who continues to insist that the HST is a positive tax for business will make yet another concession and allow the Corporation to qualify. Either way it makes the introduction of this tax not only unfair in its application, but also a sham in terms of the stated neutral impact.
Finance Minister Hansen is quick to say that small business will benefit as a result of the input tax credits, and that he “expects those savings will be passed along to the consumer” rather than go into the pocket of the business in question. To think that hard pressed business owners coming off one of the worst years in memory won’t pocket any savings is like expecting a monkey not to climb a tree.
There is so much dishonesty surrounding the introduction of this HST. Not only were the voters not told that this would be a major initiative by this government, but the government’s message is steeped in rhetoric and served to the people like a weak, and bitter tea. If the HST is so good for business, then why have so many lobbied so hard for exemption or concessions, and why has the government been so willing to hear the concerns, and in some cases given them?