British Columbia voters dump harmonized sales tax

British Columbians have voted to dump the HST. The tax has been killed with 54.73 per cent of voters turning it down, forcing the provincial government to revert to the provincial sales tax and to plug what it has predicted will be a gaping hole in its budget.

VICTORIA — British Columbians have voted to dump the HST.

The tax has been killed with 54.73 per cent of voters turning it down, forcing the provincial government to revert to the provincial sales tax and to plug what it has predicted will be a gaping hole in its budget.

Reaction began flowing in immediately after the long-awaited results came in. Voting in the mail-in referendum closed Aug. 5.

The Canadian Taxpayers Federation called the defeat good for democracy, but bad for the economy.

The B.C. Federation of Labour said the result is a “victory for common sense and working families.”

The fledgling B.C. Conservatives, whose leader had originally supported the HST, called the defeat of the tax a failure on the part of the B.C. Liberals to convince people it was in their best interest.

Finance Minister Kevin Falcon has said the B.C. government would be looking at a $3 billion hit — including repaying Ottawa the incentive money it forwarded to implement the tax — if voters decided to get rid of the HST.

The net impact of a dropped tax would be an immediate increase in next year’s projected budget deficit to $2.56 billion from $925 million, he said.

That would inevitably mean cuts to government programs and a prolonged period of provincial deficits.

Earlier this week for the first time, Premier Christy Clark acknowledged her government had a “Plan B” in case the tax was defeated.

“We’ve done a lot of thinking about our Plan B, and we’ve given it a great deal of effort, knowing that it may not be necessary but it’s better to be prepared than not,” Clark said.

“I know what Plan B will look like. If the HST is rejected, we’re just going to get to work. We’ll just roll up our sleeves and get down to work.”

She didn’t provide any details of the plan.

More than 1.6 million people sent their HST referendum ballots back to Elections BC during the almost-eight-week voting period.

That represents just over half the number of people who were eligible to vote and amounts to almost as many British Columbians who voted in the last provincial election.

The turnout for the referendum is considered particularly remarkable given that ballots were mailed in during the summer and with a postal strike getting in the way.

The provincial government had said keeping the harmonized sales tax was crucial to the province’s economic future.

Clark had moved to make the tax more palatable by saying she would lower the HST to 10 per cent from 12 per cent by 2014.