Into temptation

It will be tempting for the provincial opposition parties in Ontario to leap on the decision by B.C. voters last week to scrap the HST in that province. They must resist the temptation.

B.C. voters chose in a referendum last week to get rid of a hugely unpopular tax that many felt was heaved upon them by a government that many concluded had lost touch with the people. Gordon Campbell quit in part because of the furor over the HST. Now the tax is gone—but the headaches remain.

As in Ontario, the federal government kicked in a billion or so dollars to help ease the transition to the new tax. They will want their money back. B.C. doesn’t have a billion dollars lying around—so they will likely have to borrow it. Millions were spent by businesses small and large to make the switch; more will be needed to fund the switch back. Add these bills together along with the $30 million referendum and B.C. voters will be paying for this misadventure for some time.

It seems at least some of these voters began to have second thoughts. A year ago 75 per cent of those polled in that province wanted to get rid of the HST—but last week just 54 per cent voted to repeal it.

Many Ontario voters aren’t happy with the HST either. Small businesses in particular have suffered. Many have had to pass along an eight per cent increase in their prices— with nothing back in return. Furthermore a muddled government bureaucracy has done astonishingly little to accommodate and assist those who are on the front line collecting this tax on their behalf.

But it would be a mistake for those provincial parties seeking to replace Dalton McGuinty’s Liberals to agitate for scrapping the HST in this province. First, we are bound by a five-year legal agreement that makes exiting a costly proposition. McGuinty should be punished for making such a deal—but there is no value in incurring more wasteful spending trying to reverse it.

Most businesses have already made the transition— unwinding the process would be just as painful. Consumer taxes, like the HST and the GST before it, tend to be more visible and therefore less vulnerable to manipulation than other forms of taxation. They tax consumption rather than income—your coffee and muffin rather than your paycheque.

Ontario voters, and I suspect B.C. voters too, don’t object to paying taxes when feel they are getting good value for the money they contribute. The trouble is that governments, after a few years in power, tend to forget that folks worked hard produce this tax revenue. They forget that it isn’t their money—it’s merely entrusted to them to spend wisely and carefully. Once they lose touch with the taxpayer they start sloshing dollars around like green beer on St. Paddy’s Day. Courthouses suddenly cost a quarter of a billion dollars—each! Car makers are lavished with bailout money. Desperate deals are hatched with Asian conglomerates and parasitic industrial wind and solar developers so that McGuinty can appear green. These sloppy arrangements steal resources from the real work that needs to be done in energy conservation as well as research and development.

Ontario voters will get the chance to render their verdict upon Dalton McGuinty’s government early in October. But it would be unwise to hand the keys to Tim Hudak and the provincial Conservatives if all they offer is a willingness to pander to a base desire to cut taxes.

Taxes fund the things we admire and value about our province. They pay for hockey rinks and hospitals and schools. It is one of the ways we lend a hand to those less fortunate in our midst. They fund the things that make us proud to be Ontarians.

We don’t mind paying our share—we get cranky, however, when our contribution is taken for granted and spent foolishly.

rick@wellingtontimes.ca