Out with the new, in with the old.
Close to 55 per cent of B.C. residents (54.73 per cent) voted to reject the harmonized sales tax (HST) in results released by Elections B.C. Friday.
Results were extremely close in the Shuswap riding with only 72 votes separating nay from yea.
A total of 22,332 ballots were returned with 11,202 residents or 50.16 per cent voting no, or in favour of keeping the HST. There were 11,130 people or 49.84 per cent who voted yes to get rid of it.
“It was very, very close,” said Shuswap MLA George Abbott, who is also B.C.’s education minister. “There were several ridings that were very close to 50-50, and that reflected the balance of opinion in those ridings. There were probably far fewer ridings where there was a great discrepancy between the yes and no vote.”
Premier Christy Clark vowed that the former provincial sales tax will be reinstated with the same exemptions that existed before July 2010. That means restaurant meals, haircuts and a variety of services will only be subject to the five-per-cent federal goods and services tax, but the transition is expected to take a year and a half.
The food service industry was among the most vocal opponents of the HST, which saw increases to the amount of tax paid on restaurant meals.
Locally, Ingrid Sakamoto, an owner of Oishii Express, was rejoicing at the news, calling the move to the HST “slimy from the get-go.”
“It made a huge difference to our business. We had to lower our base prices to stay competitive and remain attractive to customers once the HST was brought in, but our suppliers of crab or avocado or other ingredients certainly didn’t lower prices.”
Sakamoto had put up a sign at her till noting the difference people were paying with the HST.
“The people could see what was going on, they voted and they voted correctly, in my opinion.”
Finance Minister Kevin Falcon has estimated that scrapping the HST will cost the province about $3 billion in the next few years.
The B.C. government will have to borrow to pay back the $1.6 billion transition fund from the federal government, with a payment schedule that will have to be negotiated with Ottawa.
“I’m disappointed by the result, but I respect the decision tendered by the electorate of B.C.,” said Abbott. “I’m pleased the decision has been made, and I’m disappointed by the decision from an economic perspective, but I’m pleased we can move on now.”
The finance ministry also projected that the HST would bring in an additional $600 million in revenues in each of the next two years, based on economic growth and extending the seven-per-cent provincial portion of the sales tax to a variety of services covered by the federal goods and services tax.
Falcon said the province will reinstate the combined 12 per cent PST and GST tax system following the referendum decision. He said an action plan has been established to help ensure an effective and orderly transition.
The PST will be reinstated at seven per cent with all permanent PST exemptions. The province may make some administrative improvements to streamline the PST.
The transition period is expected to take a minimum of 18 months. During this time, the provincial portion of the HST will remain in place at seven per cent.
Eligible lower-income British Columbians will continue to receive the B.C. HST credit until the PST is re-implemented.
-with files from Black Press
correspondent Tom Fletcher