Thursday, February 04, 2010

Will B.C. have a referendum on the HST?

They will if Bill Vander Zalm (yes, that Vander Zalm) gets his way. From Elections BC:

British Columbia’s Chief Electoral Officer, Harry Neufeld, has granted approval in principle on an initiative petition application. The petition will be issued to proponent William Vander Zalm on Tuesday, April 6, 2010. The title of the initiative is: An initiative to end the harmonized sales tax (HST).

“This is the seventh initiative petition application to be approved since the legislation came into force in 1995″, notes Neufeld.

Any registered voter can apply to have a petition issued to gather support for a legislative proposal. After the petition is issued, the proponent will have 90 days to canvass and collect signatures of at least 10% of the registered voters in each of the 85 electoral districts.

Individuals or organizations who intend to oppose the initiative, conduct initiative advertising, or canvass for signatures must be registered with Elections BC. The deadline to apply for registration as an initiative opponent is March 8, 2010.

Registered voters as of April 6, 2010 may sign the petition for the electoral district in which they are registered. Voters may only sign the petition once.

The release notes this is the seventh petition application to be attempted under the legislation since 1995. I don’t recall any of the others, so I’d guess they didn’t take off. Certainly they didn’t succeed. I know the similarly structured MLA recall ability has also regularly failed to come close to success. And that only requires voters in one district.

An HST referendum requires 10 per cent of voters in every riding to sign on, and they have to do it in 90 days. That’s a tough hill to climb. For sure, there is anger in the province over the HST and particularly, I think, around the fact it came just after an election in which Gordon Campbell made no mention of it. But does the Vander Zalm camp have the organizational moxie to pull this off? Perhaps, but I’m skeptical. It has a chance, though. It will be interesting to see if Carole James and the BC NDP sign on.

Here are the specifics of the Vander Zalm initiative:
The purpose of the initiative draft Bill is to declare that the agreement between the federal government and the British Columbia government to establish a harmonized sales tax (HST) is not in effect. The draft Bill would reinstate the 7% provincial sales tax (PST) with the same exemptions as were in effect as of June 30, 2010 and establish the provincial sales tax as the only sales tax in British Columbia for the purposes of raising provincial revenue. The draft Bill proposes that it be effective retroactively to June 30, 2010. The Bill also proposes that the provincial share of HST revenues received between June 30, 2010 and the date of Royal Assent of the Bill that exceeds what would be collected under the PST rules as of June 30, 2010 would be reimbursed to British Columbians on a per capita basis.

What happens if they get the necessary signatures? A quick perusal of the Elections BC guidelines outlines the process:
The Select Standing Committee on Legislative Initiatives must meet within 30 days of receipt of the initiative petition and draft Bill. The Select Standing Committee has 90 days to consider the legislative proposal. The Committee must either table a report recommending introduction of the draft Bill or refer the initiative petition and draft Bill to the Chief Electoral Officer for an initiative vote.

If an initiative vote is required, a vote will be held on September 24, 2011, and on the last Saturday of September in every third year after that date. If more than 50% of the total number of registered voters in the province vote in favour of an initiative, and more than 50% of the total number of registered voters in each of at least 2/3 of the electoral districts in the province vote in favour of an initiative, the Chief Electoral Officer must declare the initiative vote to be successful and the government must introduce the Bill at the earliest practicable opportunity.

After a Bill is introduced into the legislature, the requirements of the Recall and Initiative Act have been satisfied, and any subsequent reading, amendment, or passage of the Bill will proceed as with any other Bill, with no guarantee of passage.
So, by my read, the committee (on which I’d imagine the governing Campbell Liberals would have a majority) could either decide to introduce (and presumably support) the bill, ending the process with its passage (unlikely they’d flip-flop on the HST) or let it go to a referendum in a year-and-a-half. If it did get that far, the latter scenario would seem more likely. Even if the referendum succeeds, in theory in seems the government could still use its majority to kill the legislation, but with a clear verdict in a referendum that scenario seems highly unlikely.

It would be an interesting campaign and, as much as the anti-HST folks would like to think they’re on the side of the angels as anti-tax crusaders, the reality is far different and a referendum could allow some of those nuances to be examined. Still, the pro-HST campaign would be a challenging one to wage.

My question for Vander Zalm though, and it’s not a small one: would he give all that harmonization money ($1.6 billion) the Harper Conservatives gave the province back to the feds? That would leave a huge hole in the province’s budget. What cuts would he make to compensate for it? The fact is, as much as some opponents may wish, I don’t think the HST genie can be stuffed back into the bottle. I suspect the smarter among the opponents know this – they’re just playing the politics.

And while such practical considerations will likely pale next to the populism of this thing, I really fail to see how the HST genie can be gotten back into the bottle. Despite the obvious difficulties in selling it, and the expected difficulties in implementation, not to mention the poor timing of doing this during a downturn, the fact remains that the idea of harmonizing federal and provincial sales taxes is good policy. Tough politics, yes, but good policy. We can take issue with the nuts and bolts, and demand tinkering to reduce negative effects, but the overarching policy is sound. It will save businesses money and create jobs for citizens. It did in Atlantic Canada, and it will in Ontario and B.C.

While I’ll take issue with Campbell conveniently finding religion on this mere days after an election, and with the Conservatives running away from it despite actively encouraging it and writing huge cheques to grease the wheels, it is still the right policy and I think more people should give credit to politicians like Campbell and Dalton McGuinty that pursue the right policy, even if the politics are horrible. Certainly it makes me think less of those that know the policy is right, but oppose it solely for partisan advantage.

I’m doubtful this will ever come to a referendum vote. But I hope this doesn’t mark a move towards the ballot initiative craziness we see in the U.S. political system, a trend that has led in large part to California’s fiscal crisis. It may be easy to rally populist anger against a government decision. But governing isn’t black and white. Governing is a series of interlocking decisions and tough choices. Every decision has rippling consequences. Pull one string and the whole tapestry unravels pretty quickly. Kill the HST, what happens then? What other taxes change to compensate? What does it mean for businesses? What about the federal compensation money? What budget cuts need to be made to give that back?

It’s not as easy as voting on one item in isolation. That’s why I’m not supportive of this sort of initiative campaign. We elect our political leaders to govern on our behalf, using their best judgment to consider all the factors and make the best decisions they can. We trust in their judgment.

And if they don’t live up to that trust, if we disagree with their calls on these tough choices, the place to make our displeasure known is by voting them out on election day.

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Volkov said...

While the HST is a very controversial issue and I can understand why someone would want a referendum on it, ideas like that are tantamount to the hyper-democracy you find in some US states.

Case and point with California; there, the government cannot raise or lower taxes unless the citizens vote on it. This has allowed California's budget finances to end up being some of the worst in the US, simply because the government has no power to generate revenue unless the population agrees. And as you can guess, rarely does it happen that the voters vote to raise taxes. But they also vote to have the government introduce more services, which might seem self-defeating but somehow I don't think most Californians understand how a budget works. And this goes on and on.

If Vander Zalm got his way, he'd be setting up this sort of precedent. If voters can vote directly on the HST, why not the entire budget? I mean, there is a reason why there are elections - if you don't like what the party in power did, vote them out!

Troy Thomas said...

The difficulty in bringing the referendum to life is its Achilles heel (BCer forgot to mention the exceedingly short amount of time Vander Zalm has to even get this referendum to life).

Will it pass? Why ask that when it's not even passed its first hurdle?

Even were this to pass, we're not likely at all to see a situation similar to California come to fruition, as there's no filibuster here in BC in which a Republican minority can handcuff the Libs, and also there's a huge lack of there being a governator unable to get his budget passed because he needs a two-thirds majority.

Finally, it's a bit strange to think of how Vander Zalm, who got his behind trounced out of office after introducing the PST is now the champion against the HST. Oh well, c'est la vie.

Mtn Goat said...

What some former premier might or might not have done is of no interest to me. The issue here is that Campbell slipped this one in after the election with no public discussion. Once again, ordinary taxpayers will pay for this one. It's the kind of hidden agenda issue that we accuse Harper of having and it isn't made any better because Campbell labels himself a Liberal. In reality, he's as conservative as Harper and if there were any reasonable opposition that didn't keep shooting themselves in the foot, this vastly unpopular premier and his cronies would be turfed out of office. I only wish I didn't have to wait 4 more years to do it.

philip.neves said...

In Response to Volkov. The problem in BC is not that so simple as we just vote them out. We had no idea that they were going to bring in the HST. They didn't tell us. In fact they lied about it. They said they wouldn't in the last election.

I also take exception of the idea that more democracy is a bad thing. I personally think allowing the government to take money out of our pocket without justification and for any reason is a bad thing. The idea of democracy is the people make the choices for themselves. If they want to bring in a new tax to help pay for services then so be it. If they don't then the government in question must respect that and find another way.

We are getting to the point where 60% of our income is being eaten up by taxes. If your making $50K a year then you pay the full 42% plus the extra 12% HST. That is 54%. That means that more then half your income goes to the government when you spend your money. How is that fair?

Such breaks are needed so that we don't have governments like the one we have in Victoria who go on spending sprees and then just dip into our pocket whenever it suits them.

As for California I think people who make such comments should actually go down there and see whats going on before making such comments. The reason why California is bankrupt is that the previous governor left the state in a financial mess. He over spent not because the voters don't vote for taxes.