NDP leader Adrian Dix brought his party's anti-harmonized sales tax campaign to the Zocalo Cafe in Courtenay Monday, calling for a yes vote in the referendum to scrap the B.C. Liberals' HST.
A vote against the tax will benefit middle and working income families and small businesses, says Dix, whose party is seeking a return to the seven-per-cent provincial sales tax.
"Working families, in the first two years of the HST, many of them will pay $2,000 each and up in additional taxes in order to subsidize the tax rates of big business," said Dix, noting the HST is a "tax shift onto consumers" that results in a double hit for families that operate small businesses.
"Definitely in my business I can't hire as many people as I did last year," said Oliver Clarke, owner of Oliver's Quality Painting. "I can't afford to pass on the HST savings for my little corporation. I need it for bread and butter."
Clarke said seniors need to think twice before decorating their homes when they see $600 in taxes on a $5,000 job.
"Seniors in the Valley have been paying more and more user fees on everything," said Courtenay resident Gwyn Frayne, noting expensive prescriptions and higher health care costs. "I don't see many happy seniors any more. The HST was the last straw for many of us. I worked all my life, as my husband did, and we now have to postpone things like painting. We can't go out as much for food, and we can't go on holidays because of being on a fixed income."
The Liberals have promised to cut the HST rate by two percentage points over the next three years, raise corporate income taxes by two points to 12 per cent, and delay a small business tax cut scheduled for next year. The small business income tax sits at 2.5 per cent, scheduled to drop to zero in 2012.
Dix notes the Liberals said the HST would be revenue neutral, create jobs and benefit health care, but then spent $5 million on advertising during the referendum while closing group homes, and not allocating money for classrooms and acute care beds in hospitals.
He accused the province of "playing games on this issue" that gives a "massive tax cut to big business."
Elections BC is in the process of sending out more than three million ballots for the mail-in referendum. Ballots must be returned by July 22 to be counted.
"They (Liberals) want a low turnout," said Dix, noting a 38 per cent voter turnout in the last mail-in ballot. "They can succeed only if there is a low turnout."
Zocalo owner Catherine Bell, noting the difficulty of explaining to customers the extra seven per cent charge on a cup of coffee, said the HST is hurting hers and other businesses in terms of revenue and growth.
"We don't pay HST on most of the product that we get in," she said. "We have to charge HST to our customers on all food that goes out the door. So basically I'm a tax collector for the government."
According to research, members of the BC Restaurant & Foodservices Association have suffered a 15 per cent drop in sales under the tax.
Comox Valley Liberal MLA Don McRae said restaurant owners selling wine or beer should be reaping some costs savings, considering the "substantial decrease in the liquor tax.
"There's some cost savings there," he said, noting "embedded costs" through the HST that can be used as input tax credits.
"I'm not going to lie to anybody," McRae said. "There are some things that are going to cost more, like 20 per cent of the items that people currently buy. Services (such as accounting) are amongst them."
Finance Minister Kevin Falcon claims the average B.C. family, which pays an additional $350 as things stand, will see an overall reduction of $120 a year when the HST rate drops to 10 per cent.
"Because of that, 80 per cent of the things you are buying will be less expensive now," McRae said. "We've decreased the small business tax to one of the lowest levels in the country. It is substantially lower than it was under the NDP."
He said the Liberals want to ensure a balance between providing essential services and growing the economy.
"We're making sure the consumers, the families of the province, aren't going to be hurt too harshly by this tax. In fact, they will come out ahead over time. And small businesses, they're not going to see their taxes go up, they're just not going to go down any farther. It's not about raising taxes, it's about not lowering them."
McRae admits government was less than exemplary when introducing the HST. Nevertheless, he cautions voters not to play "economics of politics" before casting their vote.
"I want people to make their decision based on how it affects them economically," he said.
reporter@comoxvalleyrecord.com
