Business & Finance Taxes

British Columbia Voters Do Away With HST

The people of British Columbia have decided, by some 55 percent, that the Harmonized Sales Tax, or HST, is not welcome in the province. Whether it was a vote for how the tax was introduced by the Liberals, or on the change in taxation itself, the year old tax will be phased out. It will however take 18 months for that phase out, and cost the province roughly $3 billion to do so. British Columbia must also refund $1.6 billion to Ottawa, a sum contributed towards getting the HRT up and running.

A few neighborhoods were in favour of keeping the tax, among them West Vancouver-Capilano, which voted roughly 65 percent to keep the HST. West Vancouver Sea-to-Sky and North Vancouver-Seymour joined them with roughly 60 percent of its residents in favour. The North Vancouver-Lonsdale area showed a 52 percent approval of the tax. All of these ridings have Liberal MLAs. Ralph Sultan, who is MLA from West Vancouver-Capilano, noted that people in these areas were more sophisticated and understood the issue.

The referendum results could spawn a fall election. Premier Christy Clark advised MLAs to prepare for one, but as yet none have been called. It is possible that the voters just don't want to deal with an election so soon. The killing of the HST was a blow to Clark and the Liberal party, and a fall election could hurt or help them.

BC Ferries Running At a Loss, Wants to Cut Sailings

During the first quarter of 2011 BC Ferries had a deficit of $5.5 million. Compare that to the same time period in 2010 when the company made $900,000 in profit. David Hahn, the CEO, is blaming the sagging economy for the twist of fate experienced by the company. He had previously predicted the firm would see a $20 million loss for the entire year, which in itself was not great news.

So, what is Hahn's solution? Cut 400 sailings each year from the system, some of which would come from the Horseshoe Bay and Vancouver Island routes. His proposal is already in the hands of the provincial government, which would have to sign off on the idea.

Perhaps the economy is having some effect on the lack of traffic. Passenger only travel has decreased to levels not seen in 20 years, and as far as vehicle travel, that is also coming in at an 11 year low. But it is more likely that the rapid rise in ferry fees, for both passengers and vehicles, may be a big part of the problem. People are limiting their trips on the ferries, not taking the impromptu trips to and from the mainland anymore. It's just too expensive. And plans are to increase fares again on an annual basis, some four percent on the major routes, and as high as eight percent on routes that see fewer passengers, like those to Bowen Island. People will be even more frugal with their ferry usage.

Of course the high salaries being paid to top executives, including Hahn, may also have something to do with the deficit. The government already pays $125 million annually to the firm to run the ferry service. Privatizing the service was probably not such a good idea. The ferries are part of the marine highway, an essential service for those living on Vancouver Island and the other populated islands in the sound. Jacking up fares and cutting service only punishes people for living anywhere but the mainland. The provincial government should take back control of the ferry system, or get going on plans to build a lot of bridges.

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