The referendum results are in, and Burnaby residents, along with the majority of B.C., have voted to axe the harmonized sales tax.
Elections B.C. announced the results this morning, Friday, Aug. 26, and 54.73 per cent referendum respondents voted to get rid of the tax, while 45.27 per cent voted to keep it.
While the vote was close in many areas, all four of Burnaby's provincial ridings chose to get rid of the HST.
Burnaby's two NDP-held ridings voted against the HST: Burnaby-Deer Lake at 62.62 per cent, and in Burnaby Edmonds that figure was 64.55 per cent. For the Liberal ridings, 60.34 per cent of Burnaby North constituents voted against the HST, while 58.77 per cent did the same in Burnaby-Lougheed.
Janet Routledge led the campaign to get people to sign the anti-HST petition in all four Burnaby ridings. Routledge, now an NDP candidate for Burnaby North, was ecstatic over the today's results.
"I think the Burnaby results strongly demonstrate that democracy is alive and well in Burnaby. People spoke, people cast their ballots, and they made a real statement in wanting input on how the shared resources are used and how to use them," Routledge said.
Routledge also said the results were a repudiation of the Liberals and that it wasn't a tax revolt -what people rejected was a lack of transparency on how the tax was brought in.
"I think people voted against a bad tax policy. I think it's more than just punishing the Liberals. Certainly the people I talked to, the vast majority do not think it's a good tax. They recognize it as a shift (of) the tax burden from the corporations and the wealthy onto the backs of people who can less afford it."
The 12 per cent HST came in effect July 1, 2010, combining the seven per cent provincial sales tax and the five per cent federal goods and service tax.
The referendum was conducted by mail-in ballot. Nearly 1.6 million people responded, about half of B.C.'s eligible voters.
Kennedy Stewart, MP for Burnaby-Douglas, was expecting close results.
"British Columbians really put a final nail in the coffin about the HST. The big question is whether the Harper government will forgive the $1.6 billion," he said, referring to the money that the federal government offered B.C. to help transition to harmonization. Whether the province has to pay that back remains to be seen, but Stewart is optimistic that there will be room to negotiate.
SFU economist John Richards was disappointed the HST was rejected but not surprised.
"This tax was introduced, to put it mildly, in an inelegant way, and there was kind of a natural opposition that rose, both from the left and right in opposition to the tax," he said.
Richards was also one of four expert panelists that co-authored a May report on the HST for the provincial government.
The HST is what economists call a value-added tax, only the end consumer pays the tax. With the old PST and GST system, manufacturers typically pay tax on things they use to make their products and embed those costs in their final prices. Foreign governments from both sides of the political spectrum use value-added tax systems like the HST, Richards pointed out.
"Economists are almost universally in favour of organizing sales taxes on the principle of value-added," he said.
Richards also said the increase in consumer prices from the HST was modest, and that the vote was more reflective of what people thought about the government, not the tax.
"Deciding tax policy by referendum by is not a good idea," he said. "The right place for deciding ... is the election."
The provincial government has already set out an "action plan" to transition back to the PST and GST system. The PST will be reinstated at seven per cent and all of the old permanent PST exemptions will be reinstated.
The government expects the transition period will take 18 months at least. The provincial portion of the HST will remain in place at seven per cent, and eligible lower-income British Columbians will continue to receive the B.C. HST Credit until the PST is re-implemented. The B.C. HST credit will then be replaced by the re-implemented PST credit.
The province also plans on entering discussion with the federal government about paying back the $1.6 billion.
For more on this story, see Jennifer Moreau's blog, Community Conversations, at www.burnabynow.com.
