COMMENTARY · 7th April 2010
Grant Baudais, Kelowna
Having read and heard a great deal regarding the Liberals moving forward with the HST, I feel that the people of this province deserve a clearer explanation of the agreement that the federal and provincial governments have entered into.
First of all, the term “harmonzied sales tax” is misleading. The two levels of government are not joining together or “harmonizing” the PST with the GST. To do so would be unconstitutional for the following reasons.
The GST is an indirect tax, which falls within the “exclusive” jurisdiction of the federal government (Section 91 of the Constituion Act 1982). This means only the federal government, and no one else, including the provinces, can levy and collect an indirect tax within their respective (provincial) jurisdictions. Nor can they delegate a province to levy and collect an indirect tax on their behalf.
The PST is a direct tax, which falls within the “exclusive” jurisdiction of the provinces (Section 92.2 of the Constitution Act 1982). This means the federal government cannot levy or collect a direct tax on behalf of any province, period. And the federal government cannot be delegated to levy and collect a direct tax on behalf of any province either.
In 1950, the Supreme Court of Canada, in what is known as the Lord Nelson case, made it very clear that neither level of government could delegate their exclusive taxing authority to the other, nor could they receive that delegation from the other. Therefore, under the HST agreement, in order for the (B.C.) provincial government and the federal government to abide by the Supreme Court ruling, the (B.C.) provincial government has agreed to stop charging the PST altogether, which will be, in essence, “zero”, as of July 1, 2010, and the GST (renamed the HST), will be 12 per cent.
Although this agreement respects the Supreme Court decision, and the letter of the Constitution Act 1982, it certainly does not respect the spirit, purpose and intent of the law as was originally intended by the drafters of the British North America Act of 1867, now known as the Constitution Act of 1982.
The other important point worth mentioning, which has not received any attention at all, is the fact that there is nothing in this agreement that prevents the provincial government from re-instating a provincial sales tax (PST) in the future. So it is very possible that sometime down the road, we could be faced with a 12 per cent federal HST (it’s really the GST, only higher) plus a new provincial sales tax.
With this new federal excise (indirect) tax, our provincial government, with its total lack of wisdom and foresight, has now placed its complete trust in the hands of federal government to transfer comparable revenues back to the province.
I don’t know about you, but that kind of external control makes me feel uncomfortable.
If we are to be stuck with the HST, we should tell the feds what Quebec told them. “If you want us to jump on the HST bandwagon, then WE will collect the (HST) and WE will make transfer payment to YOU,” or words to that effect. Makes perfect sense to me.
I would urge everyone to make sure they make their voice heard by signing the official petition between April 6 and July 5, 2010. It’s time the government started listening to the people who elected them to their positions of trust, not the bureaucrats and big business behind the curtain.