Harry Bloy
MLA for Burnaby-Lougheed and minister of multiculturalism and social development
Question: When the HST was introduced, then-finance minister Colin Hansen repeatedly stated that harmonization would be "revenue-neutral," meaning the government would collect about the same in HST as it did under the old GST+PST system. If that's true, and the Liberals drop the HST from 12 to 10 per cent over the next couple of years, how will the government maintain services for British Columbians with less tax revenue? Answer: This is misleading. Government has always maintained that the HST would generate more revenue over time, but early estimates suggested it would be roughly fiscally neutral during the first year because of the low income credit, the housing rebate, point-of-sale and other rebates that we are providing.
It was always clear that later years would see a growth in revenue which is why, in part, the HST is better for B.C. With the proposed changes to the HST, consumers are slightly better off by about $120 per family, businesses pay a bit more and ultimately the economy grows. All of these factors ensure more stable funding for the services that we all rely on.
Q: Where are the 100,000 jobs the HST was supposed to create? What kind of jobs are they? When will they be ready?
A: There are varying studies that suggest job creation ranges between 20,000 jobs (http://bit. ly/BCChamberofCommerce) and well over 100,000 jobs ( www.hstinbc.ca/making_your_choice/independent_panel). These are jobs that cross every sector of the economy. Whether it is closer to either, we believe every job counts and support a tax that creates jobs versus one that hurts job creation.
Q: One idea behind the HST was businesses would pay fewer taxes, save money and pass those savings on to the consumer by reducing prices. Where is there evidence that this is happening?
A: The Fraser Institute has studied this question in the Atlantic provinces (Newfoundland and Labrador, New Brunswick and Nova Scotia, which harmonized their provincial taxes with the GST in 1997) and found harmonization resulted in cost savings being passed on to consumers through lower prices. I suggest you review their study at: http://bit. ly/kMkEug.
Q: HST opponents have consistently criticized harmonization as a $1.9 billion tax shift from big corporations to smaller businesses and families. What do you say to that? A: This is not accurate. As part of the changes to the HST that we announced in April, to help offset the costs of marching the rate down to 10 per cent from 12 per cent and ensure we meet our commitment to balanced budgets, we will be foregoing the planned small business tax rate reduction and increasing the general corporate income tax rate from the current 10 per cent to 12 per cent.
We are striking an appropriate balance and in fact, with a 10 per cent HST rate, instead of paying $350 more tax, B.C. families will on average pay $120 less tax than under the PST.
