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

UPDATE: Man presumed dead after boat capsizes south of Revelstoke

One Alberta man made it to shore and was rescued, the other is still missing

Bold youth-led initiatives address local needs

Revelstoke Community Foundation joins national community challenge

Okanagan-Shuswap weather: Unsettled skies dominate the week’s forecast

A chance of thunderstorms is in the forecast for much of the Okanagan-Shuswap.

Honouring ancestors through art

Jenn Ashton’s art will be featured at the next exhibit at the Revelstoke Visual Arts Centre

City hires new by-law officer, in process of recruiting another

Revesltoke city staff currently hiring in several departments

Protesters rally in Victoria over newly approved Trans Mountain pipeline

The Still No Consent! No Trans Mountain! 20 kilometre march will end at Island View Beach

Two mudslides close Seymour Arm road in North Shuswap, no one injured

Slides hit Seymour Arm Main Forest Service Road halfway between St. Ives and Seymour Arm

“Our community has had its heart broken”: South Okanagan celebrates life of David Kampe

Community and families members who knew Kampe give tearful addresses

Wildfire burning in coastal forest

A fire beside the Sea to Sky Highway is burning up a steep slope

Lower lake levels could create bumper crop of invasive milfoil

The CSRD board received an update on efforts to suppress the invasive aquatic plant

PHOTOS: Event marks one year since soccer team rescued from Thai cave

Nine players and coach took part in marathon and bike event to help improve conditions at cave

Vernon and Sicamous cannabis stores get provincial nod

Spiritleaf in Vernon will be the Okanagan’s first cannabis store.

Rock climber dies after fall at Stawamus Chief in Squamish

The man had fallen about 30 metres while climbing in the Grand Wall area

Most Read