And another step in that retreat could be in the offing. This morning, Finance Minister Colin Hansen will meet with restaurant industry representatives who will push for an outright exemption from the increasingly controversial sales tax, a move the sector says would cost $700-million.
Under the measures announced yesterday, buyers of new homes in
Mr. Hansen isn't saying yet if he will give the restaurant industry relief, but he is clearly signalling that any measures will be constrained.
The Finance Minister is ruling out any new measures that would further tinker with the structure of the HST.
If the restaurant industry gets relief, it will be outside the boundaries of the HST regulations.
Ian Tostenson, president and CEO of the British Columbia Restaurant and Foodservices Association, has said there are several possibilities, including a holiday on provincial liquor taxes, reduced small-business taxes, or even having the province pay part of companies' municipal tax bills.
Yesterday, Mr. Tostenson said he will make the case to the Finance Minister that the restaurant industry will need to resort to widespread layoffs if there is no relief, since it will see little reduction in costs with the new tax, while its customers will face a new provincial levy on dining bills.
Other industries will see costs fall as they are able to pass through the sales tax bill to consumers, a feature that Mr. Hansen says will spur economic efficiency and growth. Economic theory backs him up, but the Liberal government has seen its popular support melt since announcing in the summer that B.C. would harmonize its provincial tax with the federal GST on July 1, 2010.
Saskatchewan Premier Brad Wall also reiterated that he has no plans to make the switch to a harmonized tax.Ontario Premier Dalton McGuinty said he is not concerned that the two Prairie provinces' outright rejection of harmonization will make it a tougher sell for him. Last week, the government gave consumers new relief from the HST, granting an exemption on newspapers and snack foods under $4. But opposition members in
In B.C., the opposition New Democrats also want to scrap the move to the HST, although they have little prospect of doing so. NDP finance critic Bruce Ralston said the changes announced yesterday indicate the intense lobbying effort that the HST has triggered. “Everyone is jockeying for position to save their industry,” he said.