Fight HST leader Bill Vander Zalm(center) along with his wife Lillian followed by strategist Bill Tieleman(left) and lead organizer Chris Delaney(far left) leave the British Columbia Supreme Court after the results were announced to scrap the harmonized sales tax in Vancouver, British Columbia, Friday, August 26, 2011.Rafal Gerszak for The Globe and Mail
Anti-HST activists are gearing up for a campaign in the new year to push the B.C. government to eliminate the tax much earlier than its 2013 deadline.
Bill Vander Zalm, who spearheaded efforts against the HST, said Thursday he is looking for support to launch a class-action lawsuit against the provincial government to compel it to move faster on wiping out the harmonized sales tax.
Anti-HST activists are also planning to play an active role in by-elections in Port Moody and Chilliwack-Hope that are expected to be called early next year.
"We'll be there to ask candidates about where they stand and how quick they will move, to raise the issue, keep it alive and tell the government we have not forgotten," Mr. Vander Zalm said in an interview.
B.C. residents voted against harmonization of the federal and provincial sales taxes in a referendum last summer, one year after the provincial government combined the 5-per-cent federal goods and services tax with the 7-per-cent provincial sales tax. The 12-per-cent HST shifted a portion of the tax burden from business to consumers and imposed a sales tax on dozens of items that were not previously subject to PST.
The B.C. government has said 18 months to two years would be required to bring back the PST. Mr. Vander Zalm said he became concerned about the timing after hearing that the Liberal government may not meet its self-imposed deadline.
"I think what they are setting us up for is to keep [the tax]forever," Mr. Vander Zalm said. "The only way we can perhaps get [the government]to move is for the people to express, once more, their view on what they want to do."
He dismissed the suggestion that the government could not reverse tax policy at a faster pace. "Governments move fast when they want to move fast," said Mr. Vander Zalm, who was B.C. premier from 1986 to 1991. "They move slow when they want to move slow." He believes the provincial government is moving slowly because it receives more money from the HST than under the PST. "Every day is money for them," he said.
Finance Minister Kevin Falcon was not available Thursday for an interview. A ministry official who was not authorized to be quoted in the media said the province still anticipates that 18 to 24 months will be needed to implement the tax changes. "If we could do it earlier, we would do that," he said.
The province has to co-ordinate changes with the federal government, develop complex transitional rules, rewrite provincial tax laws and rebuild its capacity to administer the tax, he said.
The rules for transactions that begin under the HST and continue under PST, such as buying a condominium, will be ready by early 2012, according to a government timeline. Changes to both federal and provincial legislation will follow, possibly in mid-2012 or the fall.
Once the legislation is passed, another six to nine months will be required for the province to re-establish its capacity to administer the tax and for businesses to learn about and switch to the new tax regime, which takes the process to March, 2013 or later.
Eliminating the HST is more complex than introducing the tax, the ministry official said. A return to the PST requires businesses to comply with two different tax laws, each with its own set of rules and procedures, he said.
Although the PST existed before the HST was introduced in 2010, about 30,000 of the 100,000 businesses in the province are new since the PST disappeared and will have no experience with it, he said. The government will have to explain to them how they are expected to collect the tax.
A federal Finance Department official said federal and provincial finance officials "have been working closely together to develop the rules required to ensure an orderly transition."