This message was emailed to CMA Members of the Vancouver Chapter earlier today -
The referendum results have been released and the result is a close 54.73% of voters wishing for a return to the two tax system – Goods & Services Tax (GST) and Provincial Sales Tax (PST) – and the elimination of the Harmonized Sales Tax (HST). As you may recall the “No” proponants only needed a majority of voters who actually voted for the rejection of HST to be effective.
We expect an uncertain path ahead of how this will play out in the realities of transition back to the GST/PST. There will need to be significant effort by governmenht regarding drafting actual transitional rules so businesses have certainty of how to transition back to PST – there will be a significant amount of interest groups to listen to and issues to address. As a result the transtion may also include changes to the original rules including more exemptions and streamlined processes. There will also need to be sufficent time for the government to re-populate the PST office with staff and auditors. There will also have to be dialouge with the Federal Government on how the Province will repay the upfront $1.6 billion cash incentive for BC to move to the HST. We may even have a Provincial election in the meantime.
Unfortunately such uncertaintly for BC based businesses is bad for business. Out of province customers may be turned away by the uncertainty. Businesses may have spent considerable amount of money changing systems to deal with the HST only to have to revert – but maybe not even back to the identical PST system. The government has said it could take up to two years to fully complete the transition.
This result may be an emotional win for BC residents and they have certainly sent a message to the Provincial politicians; but for businesses this saga is not over yet.
Best regards
Felicity Withington
Vancouver Chair
{ 1 comment… read it below or add one }
We should all take away something to learn about this whole situation probably something along the lines of:
1) Efforts toward stakeholder buy in
2) Change management
3) Implementation of change
4) Efforts in transparency
By failing to even attempt the above issues, our government made neutral constituents vehemently opposed to something. Voters did not vote against the HST. They voted against the government’s disregard for the above issues. I highly doubt that the majority of “against” voters made efforts to get to know the HST vs. PST issues. Why would they? The point they were making is that, “We won’t lie down and allow a government to do whatever they want. They can’t say one thing and do another.” The HST issue is political because it has everything to do with politics and policy making and the methodology that was followed. I feel bad that the pro HST people thought that the HST merits could win the day. The merits of a policy will never be as important as the implementation. Are people cutting off their nose to spite their face to drive that point home to the government? To the anti HST voters, this isn’t about the HST, its about preserving democracy. I believe the best strategy to try and get the HST through would be to try and prove that the process was 100% transparent and that nobody’s democratic freedoms were harmed. If that couldn’t be proven, it was a lost cause from day one because that’s what this was all about.