COLUMN: HST horror predictions fading away

Bleak predictions of HST fail to appear

The B.C. government has released its audited public accounts for what Bill Vander Zalm enthusiasts strain to depict as Year One of the Harmonized Sales Tax Apocalypse.

So let’s survey this allegedly bleak landscape of shuttered hair salons and seniors hoarding pet food, waiting for Belgian bureaucrats to come calling for more.

Retail sales increased 5.3 per cent in 2010. Growth has softened so far this year, but there’s no evidence it’s due to the HST. (Retail sales are mostly goods, which are mostly unaffected.)

B.C.’s economy grew by four per cent, third in Canada behind those new northern tigers Saskatchewan and Newfoundland. We beat Alberta as well as have-not Ontario.

The provincial deficit dropped by nearly a billion dollars, even though spending on government services continued its relentless rise with another billion-dollar increase. That’s four per cent spending growth, the same as the growth rate of the economy. But as usual, two-thirds of it is health-care spending, growing closer to twice that fast.

Hair salons? My barber voted No to Vander Zalm. His accounting is simpler, his price is still reasonable and customers aren’t prepared to start cutting their own hair.

Restaurant association head Ian Tostenson predicted thousands of restaurants would close because of HST, and then mused about running for premier. Fortunately, we were spared from both scenarios.

Finance Minister Kevin Falcon put out some spin about how tight-fisted spending control brought the deficit down from the 10-figure range. Prudence, he called it. Prune juice is more like it.

It was economic growth that paid the bills, with mills and mines opening and consumers spending. Former premier Bill Bennett’s observation still applies: B.C. is a small, open resource economy in a volatile world market.

Commodity markets have strengthened to the point that even the rising Canadian dollar is being overcome. Expansion to Asia is proceeding, assisted by a long-term federal-provincial strategy that the NDP opposed. A skilled labour shortage already exists in the B.C. northeast and is forecast to spread across the province.

The government’s latest labour market survey estimates that B.C. will be in a labour shortage by 2016, and there will be one million job openings by 2020. One third of these will come from economic growth, two thirds from retiring baby boomers. Unlike next year’s HST revenues, this prediction is relatively easy to make with precision.

Job growth does depend, however, on a competitive tax environment, with competition from Ontario and elsewhere.

The public accounts also confirm what we found out last fall, that HST revenues have run ahead of expectations. HST haters like to claim the tax was promised to be revenue neutral. That finance ministry estimate was only for the first year, and it proved pessimistic. As with gasoline prices, external forces drown out B.C. tax adjustments in the short term.

Currently it looks as if going back to the old provincial sales tax will cost the treasury about $600 million in revenue in each of the next few years. HST rate cuts are made up by economic growth.

Or we can return to a 60-year-old retail sales tax developed for a post-war, pre-service economy, and continue a B.C. political debate that revolves around 30-year-old socialist ideology. The deficit will immediately jump back up to the 10-digit range.

So if your HST referendum envelope is still in the bottom of your recycling bin, you might consider fishing it out and casting a No vote. They have to be delivered to Elections B.C. by Aug. 5.

 

Just Posted

District of Lantzville Mayor Mark Swain, left, and Snaw-Naw-As Chief Gordon Edwards sign a memorandum of understanding outside Snaw-Naw-As Market on Friday, June 18. (Greg Sakaki/News Bulletin)
Lantzville and Snaw-Naw-As sign memorandum of understanding

District and First Nation create joint working group

Things are looking up for Vancouver Island as zero COVID-19 cases have been reported for the first time since October. THE CANADIAN PRESS/Darryl Dyck
Island records zero new COVID-19 cases for the first time since October

For the first time since October, the province is reporting zero new… Continue reading

Black Press file photo
RCMP seek suspect in Vancouver Island-wide crime spree

Crimes stretched from Deep Bay to Qualicum, Ladysmith, Chemainus and Youbou

Tilray announces new line of products offering more inexpensive choices for medical cannabis users. (News Bulletin file photo)
Nanaimo-based Tilray launches new medical cannabis product line

Symbios brand products offered at ‘better price point’ for medical cannabis products

Freighters have becomd abundant in the Trincomali Channel on the east side of Thetis Island.
Nanaimo ponders taking on waste from nearby anchored freighters

Vancouver-based Tymac petitioning the Regional District of Nanaimo to accept waste at its landfill

A small pod of Pacific white-sided dolphins pass by close to shore in Campbell River June 16, 2021. Still capture from video courtesy of Kimberly Hart
VIDEO: Dolphin sunset captured from Vancouver Island shore

Spectacular setting for view of travelling pod of Pacific white-sided dolphins

Janice Coady, left, Aimee Chalifoux and Linda Milford at a vigil for Amy Watts on Wednesday, June 16, outside Nanaimo city hall. (Greg Sakaki/News Bulletin)
‘We need to do better,’ says mother of woman killed in Nanaimo

Vigil held for former outreach worker Amy Watts, whose body was found downtown June 3

The B.C. Ministry of Education has announced close to $44 million for the province’s schools for COVID-19 recovery. (News Bulletin file)
Nanaimo-Ladysmith school stakeholders say COVID-19 recovery funding can make a difference

B.C. Ministry of Education announces it expects a ‘near-normal’ return to class in September

Regional District of Nanaimo is looking to repair sewage pipe in the Hammond Bay Road area, which was corroded by gas. (Black Press file)
Corroded sewer pipe along Nanaimo’s Hammond Bay Road will cost $5.5 million to fix

Pipe replacement and reinforcement part of $6.9-million infrastructure project

(V.I. Trail/Google Maps)
Now 90% complete, Vancouver Island trail forges new funding parnership

Victoria Foundation takes on Vancouver Island Trail Association; fund valued at $40,000

Karl and Stephanie Ann Johanson were thrilled to spot a pair of Sandhill Cranes in the Panama Flats this month, an unusual appearance for such birds. (Photo by Stephanie Ann Johanson)
WATCH: Sandhill cranes an unusual, joyful sight in South Island parkland

These birds don’t often touch down on their way between northern B.C. and Mexico

Police are asking for public assistance in locating Anthony Graham who has been charged with the murders of Kamloops brothers Carlo and Erick Fryer. (RCMP photo)
2 charged, suspect at large in killings of B.C. brothers linked to gang activity: RCMP

Kamloops brothers Erick and Carlo Fryer were found deceased in May on a remote Okanagan road

Albert Health Minister Tyler Shandro and Alberta Premier Jason Kenney unveil an opening sign after speaking about the Open for Summer Plan and next steps in the COVID-19 vaccine rollout, in Edmonton, Friday, June 18, 2021. THE CANADIAN PRESS/Jason Franson
Alberta 1st province in Canada to lift all COVID-19 public health restrictions

70.2% of eligible citizens 12 and older in the province have received a dose of the vaccine

Fraser Health registered nurse Ramn Manan draws a dose of the Pfizer COVID-19 vaccine into a syringe at a walk-up vaccination clinic at Bear Creek Park, in Surrey, B.C., on Monday, May 17, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Honour our fathers’ with COVID-19 vaccine protection, B.C. urges

109 new cases Friday, 75 per cent of 12 and up immunized

Most Read