Minister Colin Hansen tabling the provincial budget at the B.C. Legislature in Victoria, B.C., on Tuesday March 2, 2010.Darryl Dyck/The Canadian Press
Weeks before the British Columbia election campaign began last year, senior officials in the B.C. Finance Ministry were given confidential details of Ontario's harmonized sales tax agreement with Ottawa - information that B.C.'s Finance Minister Colin Hansen maintains he knew nothing about until after the polls had closed.
The fact that Ottawa was offering cash and flexibility - which became the key to B.C.'s acceptance of harmonization - was spelled out the memorandum of understanding with Ontario, a document sent to B.C.'s senior tax official, Glen Armstrong, on March 26, 2009. "We will have to update the [March 12 briefing note]for the minister based on the MOU," he instructed staff the next day in an e-mail. Mr. Hansen maintained he didn't learn of Ottawa's flexibility around the tax rate and exemptions until after the election campaign.
He said he doesn't recall reading the briefing note.
"I know it hit my desk," he said. "I would have taken a cursory look at it."
Carole James, leader of the Opposition New Democratic Party, scoffed at his explanation. "I don't think it's plausible at all," she said. "I don't think the public can believe anything from this government ... It's very clear it was on their radar screen."
Mr. Hansen said in an interview on Wednesday that he was out of the loop on the back-and-forth discussions between his officials and their federal counterparts until after the May 12 election, and that they were exploring the terms of a deal on their own initiative.
The exchanges are revealed in documents obtained under freedom of information legislation that the B.C. government released more than a year after a request for HST-related information was filed by a number of media outlets including The Globe and Mail.
"At no time did anybody at the political level in our government ask Ministry of Finance officials to put any information together or do any work on the HST prior to the third week of May last year," Mr. Hansen said.
The B.C. Liberal government is facing a massive public backlash over its decision to harmonize its provincial sales tax with the federal Goods and Services Tax, a decision that was made public two months after they were re-elected.
During the campaign, the B.C. Liberals said they had "no plans to formally engage the federal government in discussions about potential harmonization."
Even after the HST decision was announced, the government insisted it was a last-minute affair.
It likely would have been an explosive topic in the campaign - particularly if the public knew that one of the key studies underpinning B.C.'s decision to adopt the HST warned the transition would be long and painful.
In the March 12 briefing note, Mr. Hansen was told that adopting the HST would bring medium- and long-term benefits to B.C. He was also cautioned that, according to the C.D. Howe Institute, the economy would take a hit in the near term.
"The study suggests it may take five or more years before the impact on GDP is positive and even longer for real wages and job numbers to recover," stated the document.
Mr. Hansen denied there was a deliberate firewall to shield him from a controversial discussion.
Documents released through FOI