The harmonized sales tax (HST) was defeated in B.C. on Friday after it was rejected by 54.73 per cent of voters in the province.
Results for the Nechako Lakes riding however, showed that 53.32 per cent of voters were not in favor of dumping the HST and reinstating the provincial sales tax (PST) and goods and services tax (GST).
In the Nechako Lakes region, 7,767 votes were cast to answer the question – Are you in favour of extinguishing the HST and reinstating the PST in conjunction with the GST?
A total of 3,626 (46.68 per cent) voted yes and 4,141 said no.
The process to re-implement the PST and GST tax structure is expected to take a minimum of 18 months.
An action plan has been established to aid the transition process. The PST will be reinstated at seven per cent with the same exemptions that existed before July 2010.
Nechako Lakes MLA, John Rustad says he is both disappointed and concerned with the provincial referendum results.
“I’m very disappointed with the vote results … although I was pleased to see that the majority of people in the Nechako Lakes region voted to keep the HST,” said Rustad.
“HST was designed to be able to support the resource sector such as our agriculture industry, our forest industry and our mining industry and so now we won’t have that support for those industries … it’s going to create all kinds of challenges for us,” he said.
As well as his concerns for the resource sector, Rustad says he is also worried about the budget impact that getting rid of the HST will have on the province.
“Three billion dollars over the next two years is going to be very challenging … the flexibility we will have as a province with our budget now is severely constrained – it makes it very challenging to be able to put anything on the table,” he said.
He added that despite the criticism he has received by supporting the HST, he still thinks it would have brought many benefits to the Nechako Lakes riding.
“Some people were commenting that I shouldn’t have supported the HST to begin with because it was a negative impact to the riding – but in our riding the HST would have meant about $1.80 or more return for every dollar invested by tax payers,” said Rustad.
“Those were the benefits that would have come back to our riding … it’s going to be very difficult for me personally … to have to be part of a government that tries to bring back the PST,” he said.
The HST failure will be particularly bad news for the agricultural industry, Rustad added.
“When I was first elected in 2005 the agricultural industry came to me and said ‘we have got to do something about this PST – it is a killer for our industry – so much cost, so much paper work’ – and here I am now in a situation where we had the solution for the agriculture industry and now we are going to have to do something that I know is going to hurt them – its going to be a really tough thing for me to do,” said Rustad.
Local rancher and member of the BC Cattleman’s Association, Larry Garrett says the old PST tax is a nightmare for ranchers.
“To go back to the old dysfunctional PST system is just awful – its administratively a nightmare,” Garrett told the Express on Friday.
He added that be wasn’t surprised that the HST passed in the Nechako Lakes region and failed to pass in other regions.
“I’m not surprised that we passed it in this area and that the urban areas shot it down …
“That’s one of the consequences of a referendum – certain areas will suffer because someone in Vancouver is worrying about paying an extra 95 cents for a hair cut – I understand it’s certainly hard for the urbanites to see the big picture, but from up here we do see the big picture because it effects us,” said Garrett.
The rancher added that going forward, he would like to see a different tax system developed for the agriculture industry.
Under the former PST/GST system, there were a number of items that were exempt from the tax when used for farming and ranching purposes. However, Garrett says this list is not detailed enough to include all the items needed to meet today’s ranching needs.
“The way it is now – it’s ridiculous.
“If I buy barn poles to build a barn – barn poles are not exempt – when you go and complicate things by having the item exempt from PST – that to me is a more dysfunctional way.
“The qualifying rancher should be exempt – not the item,” said Garrett.
Rustad says he will be looking into what he can do to help out the agriculture industry as they go back to the old tax structure, however it will be difficult to do so with out causing delays to the transition.
“There are a few things I’m going to be looking at here over the next few months … things that we can do to improve the situation of the PST for the agriculture industry – but having said that it’s almost impossible to make any significant changes to the PST while we’re in the process of re-implementing – if we were to do that, all it would do is delay the date of which we would replace the HST with the PST,” said Rustad.