Dawn Black Grills Liberals on the HST

Debate on Bill 9 - Thursday, April 15, 2010

Note: You can find the full debate on the Legislative Assembly website.

D. Black: I rise to convey the concerns of residents of New Westminster, who like most other British Columbians, the majority of British Columbians, will be negatively affected by Bill 9 if it becomes law, the Consumption Tax Rebate and Transition Act, as it's euphemistically called in this Legislature.

It's been said that the big three in life can be summed up as hatching, matching and dispatching — birth, marriage and death. Unfortunately, my New Westminster constituents will find all three to be more expensive, thanks to the proposed harmonized sales tax, or the HST. Yes, we will all be paying and paying and paying again for everything from cribs to car seats to the wedding dress and the organist and to funeral costs. These are hardly luxury items. Well, maybe some weddings do go a bit overboard, but most are quite modest, and families strive to stay within a budget and still create a special day.

As I heard at the HST forum I hosted in March, the HST will hit my constituents in the wallet day in and day out if it goes ahead. What is particularly galling to them is that the B.C. Liberals promised they wouldn't bring it in. They even put it in writing during the election campaign last year. The kindest interpretation would be that they have short memories.

A more accurate interpretation would be that if they had told the truth, they would not have formed government. How many people do you know who really would have voted Liberal if they knew they were looking at a $1.9 billion tax grab? The B.C. Liberals deceived the voters about the HST. They didn't consult with British Columbians, and they do not have a mandate to bring the HST in now.

I was pleased to see that more than a hundred people turned out to my forum on the HST. People of all ages, ethnic backgrounds and economic positions came together in New Westminster last month. Their goal, proudly stated, strongly stated by the people who turned out, was that they want to join with others to stop the implementation of the HST.

We heard that the HST will hit particularly hard in New Westminster because of the large number of small businesses that are located there. These businesses will have to charge 7 percent more for both goods and services, a charge that will, without question, be passed onto consumers. Most restaurants, for example, are small businesses, and the restaurant industry forecasts the HST will cost as many as 12,000 jobs across the province as well as $750 million in lost revenue.

Restaurant owner Jasbir Sandhu told my community forum that the tax will mean more expensive restaurant meals, lower food sales, lower tips and job losses. He agrees with Mark von Schellwitz, western vice-president of the Canadian Restaurant and Foodservices Association, who said recently: "As one casual diner said to us, it's tough enough now. But with the HST, when you sit down at a full-service restaurant, you know you're going to be paying 30 percent more, with the HST and a tip, before you even have anything to eat."

Next door to my constituency office is a friendly, family-run coffee shop. It's called the Coming Home Café. The owner has offered space on his patio for volunteer canvassers to collect signatures on the anti-HST initiative petition that's currently being circulated. He's a small business owner. He works hard and contributes to our community. He's involved in several community organizations, including the committee that's organizing New Westminster's first pride day on August 7.

He sees the HST as yet another assault from a government which favours big corporations and insiders to the detriment of average hard-working people like himself. Like many others in the restaurant industry, he's uncertain and worried about what the future will bring. He says that it took many years to recover from the impact of the GST, and the introduction of the HST will probably force more small businesses to close down.

At the same time, tourism leaders across the province are rejecting the government's claim that the HST will not mean an increase in the price of a hotel room. The tourism industry expects to lose up to 10,000 jobs and $545 million in lost revenue.

Many of these jobs, Madam Speaker, are minimum-wage jobs. I don't need to remind you or other people in this Legislature that in British Columbia we have the lowest minimum wage in the country. Many of these minimum-wage jobs are held by young people who are supporting themselves while they're going to college or university or to get technology training.

Students who can't find jobs in the summer also face now having their student aid cut while tuition continues to rise in British Columbia at an alarming rate. The HST is yet another burden for our bright young leaders of tomorrow who are already struggling against many obstacles while they work to achieve their educational goals.

Tourism and restaurants are not the only businesses that will be negatively impacted by this tax. A recent article in the New Westminster News Leader pointed out that: "Gord Hobbis figures he'll do about three months' worth of business at his Cap's bike shop in Sapperton during the month of June. And he's not happy about that. That's because on July 1 the bicycles he sells, as well as bike parts and safety gear, will instantly become 7 percent more expensive."

Since March of 1981, bikes, bike parts, safety accessories like helmets, lights, reflectors — all of these things purchased in B.C. have been exempt from a provincial sales tax. The exemption was implemented to encourage people to get active and maybe even leave their cars at home and cycle to work.

For the most part, it's been a success, says Mr. Hobbis, especially in the last few years, when he's heard grumblings from veteran cyclists — cycling commuters — who claim that the paths and trails are getting too crowded now by other bicyclers. Hobbis, whose family has been selling bikes in New Westminster for 78 years, says the new additional tax might be just enough to put the skids to some people considering an investment in cycling.

"The government should be doing more to encourage cycling, not discouraging it," he said. "It's a healthy activity. Anyone can do it. It has no impact on the environment, and you don't need to build anything. You can ride a bike anywhere."

New Westminster resident Ken Wilkinson also agrees. Health problems prevent him from driving, so he cycles everywhere. He said: "Good safety equipment is expensive and necessary for those living in New Westminster. I have to have special disc brakes for my bike, because of all the steep hills and the wet roads. I also bought Kevlar tires after going through ten to 15 tubes a year because of all the debris from construction projects."

Mr. Wilkinson is worried people will either endanger their own safety by not buying the proper equipment or simply stop riding their bikes, neither of which is something the B.C. government should be encouraging.

On March 3, my colleague, the member for Saanich South, hosted a rally outside these buildings where hundreds of cyclists voiced their displeasure with the HST. And they reminded the Liberal government how counterproductive it is to make it more difficult for people to continue cycling or to take up cycling as a new mode of transportation.

But of course, some friends of this government have been given special consideration when it comes to the implementation of the HST. There will actually be a break for those wealthy enough to buy luxury cars. Combined with earlier increases to the threshold for the luxury vehicle surtax, the government will have saved buyers of these expensive vehicles $372 million between 2001 and 2010, while only saving buyers of fuel-efficient vehicles $59 million in the same time period. It just doesn't make sense when most people are looking for ways to improve the environment.

However, those who are unable to afford a new car or who choose to buy a car privately from another citizen will be paying even more. Forcing people who buy a car from an individual to pay HST now is not "levelling the playing field" between used car dealers and the private sellers. It actually puts the private seller at a huge disadvantage. It's sheer hypocrisy for this government to claim to be fighting climate change while they continue to give special breaks to those purchasing luxury cars.

It's even more hypocritical when, at the same time, those buying smaller, more fuel-efficient cars and especially bicycles are being hit with the full force of this new tax. This hardly seems to be an appropriate way to encourage commuters to burn less fuel or give up their cars and start cycling instead.

If the HST is going to negatively hit consumers and small businesses, who does it benefit? The answer is big business, which will pay less tax. Businesses will be able to get their money back thanks to the HST rebates. It doesn't seem fair to me that we provide rebates for businesses but not for families, especially as we are trying hard and people are trying hard to recover from a worldwide recession.

Economist Phillip Legg summed it up well at my community forum. He said the HST is a tax shift; it is not tax reform. Phillip Legg also noted there is no doubt the HST will depress consumer spending significantly. Unfortunately, small businesses are facing this during a time when many are barely managing to keep their doors open.

In some ways, I have to cynically admire the Liberals for the chutzpah in trying to pitch the HST as a way to pay for health care. Journalist Paul Willcocks pointed out: "The hokiest part of the budget was the announcement that HST would be dedicated to health care. It's an obvious attempt at phoney spin; all the money flows into general government coffers and is allocated as the politicians choose."

Seniors are one of the groups very concerned about the provision of health care, and they're certainly not accepting the government's attempts to sell the HST as a way to pay for health care. Sylvia MacLeay, the president of the Council of Senior Citizens Organizations of B.C., spoke at my community forum also. She clearly stated the harmonized sales tax promises to add an average of $900 a year to individual expenditures, an amount that is impossible for people on fixed incomes to raise.

I wonder how this government expects seniors to carry this load in addition to all the other increases they've made — increases in user fees; in MSP premiums; in hydro charges; in bus, SkyTrain and ferry rates; delisting of certain medications and cancellation of many health services.

Seniors understand that in order to have the public services they need, that we all need — public services like health care, education and a clean environment — they have to pay taxes. What they object to are regressive taxes such as the HST, which hurt both the middle class and those with lower incomes. They're willing to pay their fair share as long as other segments of society like corporations and the wealthy are paying their fair share too.

I was shocked to read in the latest newsletter from Century House seniors centre in New Westminster the following report from the executive director. She wrote in their newsletter: "HST will arrive on July 1, so there will be price increases. Our normal price review for food services is September, but this may be done sooner and incorporated into the HST price changes."

Hundreds of New Westminster seniors who visit Century House for recreation, for companionship, will face increases in the price of food served there as well as for the excellent programs that are provided at Century House.

I know the staff at Century House feel badly about this, as they are constantly striving to serve reasonably priced, nutritious meals to the large number of seniors who have lunch there in the company of their neighbours and their friends who attend the really valuable programs that are provided at Century House. It really is deplorable that the government persists with implementing the HST while ignoring the detrimental effect it will have on seniors' lives.

At the beginning of my remarks, I mentioned dispatching as one of the big three in life. There's a well-known expression that nothing is certain in life except death and taxes. This has again proven to be true. We don't even escape the HST as we depart this life.

Madam Speaker, last month the Society of Independent Funeral Directors in B.C. announced they have officially thrown their support behind the citizens' initiative to repeal the HST. Society spokesperson Michael Crean of New Westminster said: "We believe it's wrong to tax people another 7 percent for funeral services, which are a necessity for all families. The HST hurts consumers, and we strongly oppose it." And he added: "We plan to make sure all of our clients are aware of the fight to stop the HST."

I've heard from constituents who make it clear that not only will seniors be negatively affected by the HST, but services for the youngest members of our society are also being affected. An executive member of a well-respected New Westminster child care centre recently reported the following concerns.

"Our society operates a not-for-profit day care for 25 kids in a converted residence. Last year the gross rent increased by $200 per month when it was decided the GST was applicable. With the introduction of the new HST, the rent will now be subject to PST when they combine them, which means an extra $300 a month.

"Of course, the extra costs will have to be passed onto the families whose children attend our school. I'm sure there are many such stories where the government hasn't fully thought out the ramifications of its decisions on everyday people."

Madam Speaker, at a time when family budgets are already stretched thin, a long list of school supplies will also cost families more. Ballpoint pens, pencils, crayons, exercise books, rulers, glue sticks, loose-leaf paper, felt pens, scissors, calculators, geometry sets and binders are just some of the items going up in price. The HST will even increase the price for kids' sports and community groups in every B.C. community, including arena and meeting room rentals.

A well-known media commentator stated recently: "One has to wonder how much credibility the Minister of Finance has right now when it comes to making any kind of economic argument. The polls indicate voters are smarting over last year's budget, which turned out to be widely off the mark in its projections." At first the government was saying the HST would be revenue-neutral to government, but now we know revenues will actually be reduced by $330 million a year, and phasing in tax credits for large businesses will cost the government approximately $155 million more.

One has to wonder how it makes sense for the government to impose an onerous tax increase on consumers while giving a tax cut to big business, when the end result will be to increase the deficit. Increasing the deficit will further threaten essential services like health care and education, which are already hit hard by shortfalls in government funding.

Madam Speaker, even Liberal-friendly organizations are unhappy with the implementation of the HST. The impact of this tax on the construction of housing in New Westminster and across Metro Vancouver could be particularly dramatic, since it will drive up the cost of a new $600,000 home by $22,000 and also increase the cost of renovations to existing homes by 7 percent.

Peter Simpson, who is the head of the Greater Vancouver Home Builders Association, was quoted in a recent newspaper article as saying that "his members are still angry. The industry is just starting to recover from a bad year due to the recession. Now the HST, combined with rising interest rates and tougher mortgage rules, could drive away new homebuyers. It could create the perfect storm of buyer resistance in July," Mr. Simpson added.

Sales commissions, appraisals and home inspections are some of the other services connected with home buying whose costs will increase. Condo owners will not escape the effects of the tax, as their monthly fees are certain to rise when the strata council has to pay 7 percent more for gardening, for lightbulbs, for all other services, maintenance, and repair services that they require.

The Rental Owners and Managers Association of B.C. has joined the chorus of organizations concerned for gardening, for lightbulbs, for all other maintenance and repair services that they require.

The Rental Owners and Managers Society of B.C. has joined the chorus of organizations concerned about the impact of the HST. They say the tax will have a negative impact on rental housing quality and affordability. It will increase most rental housing industry costs such as property management, repairs and maintenance, and contracts by 7 percent after July 1.

The overall cost to operate rental buildings will increase by up to 3 percent as a result, about $300 per rental unit per year. Tenants could see a decrease in maintenance services as this is the only discretionary cost that landlords can reduce to offset the HST impact. In other words, virtually every British Columbian, whether they rent or own their home, will be asked to pay more because of the new tax.

Everyone will also be affected when the cost of a wide range of products and services used every day throughout the province increases on July 1. British Columbians will pay more for restaurant meals and catered foods, snack food, prepared food, heated food. They'll pay more for taxi fares, household repairs, movie and theatre tickets, amusement parks. They'll pay more for accounting services such as tax preparation and mutual fund management. Imagine that. People who go to an accountant to have their taxes done will now pay a tax to have their taxes filed.

They'll pay more for veterinary care. They'll pay more for classes in yoga, dance and cooking. They'll pay more for martial arts classes. They'll pay more in membership fees for clubs and gyms. Fees for team sports will go up. Airline tickets will increase. Facility and arena rentals will rise. Acupuncture and alternative medicine will cost more. Haircuts will increase. Repairs to home appliances go up. Laundry, dry cleaning, carpet and upholstery cleaning, and janitorial services will cost more. Car washes will be taxed.

Basic telephone services will go up. Basic cable TV service will go up. Vitamins, dietary supplements and other non-prescription medical products will go up. Residential smoke or fire alarms under $250 will rise in price. Work-related safety equipment will cost more. Magazines, periodicals, newspapers, newsletters, student yearbooks, energy-saving items and appliances for your home and vehicle, automobile towing and emergency roadside services will cost more. And there's more, Madam Speaker — many more.

Residents of New Westminster are not remaining quiet about the government's HST tax grab. They're speaking out in the local papers, on blogs, and via e-mails and phone calls and letters. Here's the text of an e-mail I received only a few days ago.

"I'm writing you to oppose the implementation of a harmonized sales tax in the province of British Columbia. Polls in British Columbia show that over 85 percent of citizens here are opposed to this tax. This opposition represents an overwhelming majority in every riding. The results of the recent federal by-election in New Westminster–Coquitlam demonstrate that any B.C. politician that supports the HST will face the wrath of the voters at election time.

"As a voter in New Westminster, I will be casting my ballot in the next election only for a candidate who opposes the implementation of the HST in B.C., regardless of political party. If you wish to have my support and the support of thousands of other constituents in this riding, I strongly urge you to vote against the implementation of the HST."

And he goes on:

"I hope you will heed the wishes of your constituents and you will act in accordance with Canadian democratic principles and political accountability with regard to the HST. I strongly oppose this tax on the basis that the B.C. Liberals have no mandate to create such a tax. It has been unfairly implemented in B.C. and will place too great a burden on consumers struggling to cope with the recession. Once again, I urge you to please vote according to the majority of your constituents' wishes against the HST."

Well, Madam Speaker, I intend to do just that. This is only one of dozens of similar messages I've received in the past few months. It's no wonder New Westminster residents and people across British Columbia feel so strongly about this issue. Before last year's election the B.C. Liberals said the dozens of similar messages I've received in the past few months. It's no wonder New Westminster residents and people across British Columbia feel so strongly about this issue, because before last year's election, the B.C. Liberals said the HST would raise the costs for consumers and restrict B.C.'s ability to control our own taxes.

It's very hard to understand. If the HST, from the Liberal perspective, was so wrong then, just a few months ago, why are the members opposite saying it's so right now? Vaughan Palmer summed up the situation very accurately in the Vancouver Sun recently. He said: "Well, if this HST idea is such a humdinger for the future of the economy, why didn't they do it before the election?"

There is no evidence the HST will help consumers. In fact, it's quite the contrary. In the Maritimes, the HST drove up the cost of necessities like housing and clothing, even though, when the HST was brought in there, these provinces actually dropped their overall tax rate. Increases in investment there were short-lived, and now several Atlantic provinces are raising the sales tax once again.

The B.C. government has offered no relief to taxpayers in the form of a lower sales tax or universal rebates, which are now being given in Ontario. This government promised British Columbians they would not bring in an HST — period. That's what they said during the election. They even put it in writing.

Then a few short weeks after the election, the B.C. Liberals betrayed British Columbians and broke that promise. Without even a semblance of consultation with ordinary taxpayers, small business, they announced the implementation of the same tax that they had criticized only a few short weeks before.

Everything about the HST says it's a tax grab by a desperate government that didn't tell the fiscal truth during the election campaign. However, British Columbians from all walks of life and all parts of the province are joining together to try and stop the HST. Thousands have signed petitions in a matter of days, joined Facebook groups and held rallies. They've contacted government MLAs to urge them to join the official opposition in voting down Bill 9.

If only seven Liberal MLAs will listen to their constituents and vote in accordance with their wishes, the legislation will not pass. I hope that the members opposite will think hard about this and sincerely consider that they were elected to represent the people who live in their constituencies, not to vote in some sort of unthinking unison in support of everything that's put before them by their government. I urge the members opposite to put the wishes of their constituents ahead of the wishes of their political task masters.

I'm confident the residents of New Westminster and all of the people of British Columbia will continue to remind this government they do not want an unfair tax that affects them so negatively, including raising the costs of the Big Three events in their lives.

I've been in consultation with people in my community and around the Lower Mainland of British Columbia, and each and every person — and they count in the dozens — has indicated their visceral disrespect for this government. I think not only do they object to this tax — they see it as a regressive tax and a tax that's not in their best interests — but they also feel betrayed by this government. I think that sense of betrayal is even stronger, in some respects, than their anger at the tax.

They feel like they had the wool pulled over their eyes, and they're very, very angry at the B.C. Liberals. They're going to remember this for a long time. Once again, I urge those seven B.C. Liberals, or more if they have the courage, to stand up, stand with the official opposition, and vote this tax down.

Citizens are again returning to the Big Three events in their lives. They're looking at ways of hatching a plan to dump the HST. They're matching wits with the Liberals about what it really means, and hopefully, by working together, they're dispatching it to the graveyard of ridiculous tax grabs.