By Michael Smyth December 29, 2009

Why is Gordon Campbell breaking his election promise and inflicting a $2-billion HST on B.C. consumers?

To hear the premier tell it, it’s because the harmonized sales tax is “the single best thing that could be done” to improve the British Columbia economy.

Campbell also said he had to bring in an HST because Ontario was introducing one and B.C. had to match it to stay competitive.

These are compelling arguments to some–especially large corporations that will claim HST rebates as a business expense.

But Ontario’s next-door neighbour takes a very different view. While Campbell is embracing the HST, the government of Manitoba is outright rejecting it–and for reasons that cast doubt on Campbell’s tax-whacking logic.

Consider our sputtering economy. While Campbell argues the HST will be good for it, Manitoba Finance Minister Rosann Wowchuck says hammering consumers with new taxes is actually a bad thing to do in a recession.

“Manitoba consumers would face $405 million in additional sales-tax costs under an HST,” says a new report from her ministry. (Read it at www.gov.mb.ca/finance).

“The province is concerned about the potential impact that this increased sales-tax burden could have on Manitoba’s resilient consumer confidence,” says the report, adding the HST represents “potential risk to the economic recovery” and would be a “burden on families at a time of economic uncertainty.”

But isn’t Manitoba worried Ontario is bringing in an HST? What about tax competitiveness?

Manitoba isn’t concerned, arguing the province is already competitive with Ontario on many other taxes–just like us. And besides, they say, our most important trading partner is the United States _ which doesn’t have an HST at all!

Manitoba also points out the HST will apply to school districts, universities, hospitals and other public bodies–hammering the government’s own bottom line.

And when it comes to prices — which Campbell argues will go down as businesses generously pass on their HST rebates to consumers –Manitoba points to a recent TD Bank report that predicts a net increase in prices due to the HST. Permanently.

By the way, Manitoba has an NDP government and a Conservative opposition. Both agree the HST would be bad for the province.

But the biggest difference between them and us is the fact that Manitoba consulted with its citizens before rejecting the HST–unlike Gordon Campbell, who is ramming it down the throats of B.C. consumers with no consultation, and after the B.C. Liberals insisted they were opposed to the tax before the May election.

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