Recall in the Fall over HST? Count on it, as desperate BC Liberal spin tries to hide reality of negative impact of new tax

Lawyer Joe Arvay briefs Bill Tieleman, Bill Vander Zalm and Chris Delaney of Fight HST

on legal action launched to overturn the Harmonized Sales Tax in BC

Despite 'Smart Policy' Spin, HST Still Hated

In last three months 72 per cent have a worse opinion of Campbell, one per cent have a better one

Bill Tieleman's 24 hours/The Tyee column

Tuesday August 3, 2010

By Bill Tieleman

"I think the roll-out of the HST has been smoother than we anticipated."

- B.C. Finance Minister Colin Hansen, July 28, 2010

Translation: The tar and feathers intended for B.C. Liberal MLAs who imposed the Harmonized Sales Tax on July 1 will wait until recall campaigns start in mid-November.

But make no mistake -- this government is still reeling from the reaction to imposing the HST that has added an extra seven per cent tax on thousands of goods and services.

Last week Hansen put maximum topspin on the B.C. Liberal government’s recent decision to cancel a plan to mail 1.6 million copies of a 12-page, full colour pro-HST flyer to every residence in the province.

That would be the mailer Elections B.C. stopped Hansen from dropping in the post box -- because it would have violated rules against unregistered opponents of the Fight HST citizens initiative then underway advertising in favour of the tax.

It would also be the mailer that Hansen won't tell us the significant cost of writing, designing and printing, despite the likelihood it will be shredded and recycled.

"The feedback we've had from the public and from many of the MLAs, many felt that it might even be in fact counterproductive at this stage,” Hansen said last week.

No kidding.

The government actually figured out that voters are not interested in being told the tax they hate is really good for them? Finally.

Measuring the HST hatred

And as for the HST itself?

"There's a growing perception that this is actually a smart policy move," Hansen said with a straight face.

Really, minister? Let's take a look at the facts -- and at the disastrous shape your government is now in as a result of imposing the HST.

Start with last week's Conference Board of Canada report that found a huge loss of consumer confidence in B.C., thanks to the HST.

The largest drop in the country came in B.C. and said Conference Board economist Todd Crawford, it "coincided almost one-for-one with the onset of the new HST tax in British Columbia."

The Board consumer confidence index fell 12.9 points to 78.9 after being 109.1 in January 2010.

Which other province now has an even lower level of consumer confidence than B.C.? Only Ontario, where an HST was also imposed in July.

Then there's the Angus Reid Public Opinion poll released July 13 that found 67 per cent of voters in B.C. Liberal ridings would definitely or probably support recall to remove their MLA from office.

That includes 35 per cent of B.C. Liberal voters who would "definitely" sign a recall petition and 19 per cent more that would "probably" sign it.

Of those who voted NDP in B.C. Liberal ridings, 87 per cent would definitely or probably support recall, as would 82 per cent of Green Party voters.

Libs pummelled in polls

And no wonder -- the poll found 30 per cent of respondents expect the HST to "severely" impact their household finances, while 43 per cent think it will "moderately" do so -- only four per cent thought it would have no impact.

For businesses impacted directly by the additional seven per cent the HST added to the GST for the first time, the poll only had bad news.

A full 70 per cent of respondents said they will eat out less often in restaurants due to the HST now applying to all food, while 62 per cent will reduce going to concert and sporting events, and 60 per cent will cut movie and theatre attendance.

That sentiment explains two signs in a restaurant where I ate last week: one looked like a B.C. car license plate but read: "HST NFG." The other apologized for increased prices, blaming the HST.

All this shows why 75 per cent of those polled say they want the HST abolished and only 17 per cent would keep it.

And it demonstrates why the B.C. Liberals dropped even further in support, to a record low 23 per cent -- a massive 23 per cent dive since the 2009 election -- while the New Democrats sit at double that support -- 46 per cent.

Premier Gordon Campbell's "momentum" score? A remarkable 71 per cent, which means that in the last three months 72 per cent have a worse opinion of Campbell and just one per cent have a better one.

Recalls in the offing

Could things possibly get any worse for the B.C. Liberals? Oh yes.

By August 11 Elections BC will announce if the Fight HST initiative petition to kill the tax -- which I am involved with -- has been verified as reaching the sufficient number of signatures to be valid.

With 705,643 signatures obtained in less than the 90 day time limit and a safety margin of an extra five per cent more than the minimum 10 per cent required in every one of B.C.'s 85 ridings, the initiative should pass muster.

That would force a B.C. Legislative committee with a B.C. Liberal MLA majority to either send a bill to extinguish the HST to the Legislature or alternatively hold a non-binding vote on the HST across the province on Sept. 24, 2011.

Neither option will help the government, but officially voting down the citizens initiative would likely inflame those who signed -- and just before recall campaigns can be filed starting November 18.
B.C. Liberal MLAs could completely avoid recall -- but not the way they want to.

Battle moving to court

Starting the week of August 16, Fight HST's veteran lawyer Joe Arvay will argue in B.C. Supreme Court that the HST is unconstitutional and must be struck down.

Arvay's argument: every other province which has the HST passed explicit legislation imposing the tax -- but B.C. never did, instead only eliminating the old Provincial Sales Tax and signing a backroom deal with the federal Conservative government to bring in the HST.

If successful, the HST could be struck down by the courts, making the tax illegal and putting the government into a disastrous situation.

That same week a coalition of big business groups that support the HST and the B.C. Liberals will argue conversely that the Fight HST citizens initiative petition itself is unconstitutional.

But if the Council of Forest Industries, the Independent Contractors and Businesses Association, the Mining Association of B.C., the B.C. Chamber of Commerce, the Coast Forest Products Association and the Western Convenience Stores Association are successful, those voters who signed the initiative petition in good faith will likely be furious that the Elections BC-approved official attempt to get rid of the HST has been derailed by big business, again fueling recall efforts.

But there was one tiny bit of good news for the B.C. Liberals in the poll -- they still retain the most support of any political party in the province with just one segment of society -- those who earn over $100,000 a year.

What happens if Campbell ignores the initiative petition?

Recall in the fall -- count on it.

UPDATE - The Canadian Restaurant and Foodservices Association (CRFA) is today calling on Premier Gordon Campbell to take immediate action to mitigate the effect of the HST on restaurants after a province-wide survey of owners found that 72 per cent of respondents said the HST on restaurant meals has had a negative impact on business since it took effect July 1.

The CRFA says that on average, respondents reported a 10 per cent decline in sales compared to the same period last year.

Here is their news release:

* * * * *

Survey shows B.C. restaurants hit hard by HST

VANCOUVER, Aug. 3 /CNW/ - The B.C. restaurant industry's worst fears about the HST have been realized.

In a province-wide survey by the Canadian Restaurant and Foodservices Association (CRFA), 72 per cent of respondents said the HST on restaurant meals has had a negative impact on business since it took effect July 1.

On average, respondents reported a 10 per cent decline in sales compared to the same period last year.

"There's no question the HST is hurting B.C. restaurants of all types, from fine dining to take-out," says Garth Whyte, CRFA president and CEO. "On behalf of our members, we will continue to press Premier Campbell for action. With numbers like these, we urgently need government to work with us to mitigate the negative impact of tax harmonization."

The CRFA survey found that:
- only 3 per cent of respondents report the HST is having a positive
impact on their business;
- 72 per cent say the HST is having a negative impact;
- 53 per cent say their customers are spending less;
- 56 per cent have fewer customers;
- 47 per cent have been forced to cut back on staff/staff hours to
adjust to the HST; and
- 26 per cent have had to offer more deals and promotions to mitigate
the HST fallout.

Since HST was first announced more than one year ago, CRFA has warned government that the new tax would result in significantly lower sales for British Columbia's fourth-largest private-sector employer.

"The HST has dramatically tipped the playing field against restaurant operators. Their customers are spending less or diverting their spending to tax-free alternatives in grocery stores," says Mark von Schellwitz, CRFA's vice president, Western Canada. "It's time for government to step up and take action to help our members deal with a very tough transition to this new tax."

Despite receiving more than 200,000 signed petitions from restaurant industry owners, staff, and customers opposing a new meal tax, government has thus far not addressed their concerns.

The CRFA survey was conducted online between July 26 and 31, 2010. The findings represent 802 B.C. restaurants.

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