NEWS RELEASE · 21st July 2010
BC NDP Caucus
Previous Mintz study shows HST will lead to job losses, not gains
The B.C. Liberal government continues to mislead the public on the HST, only now they are using untold millions of taxpayers’ dollars to do it, say New Democrats.
“The claims the B.C. Liberals are making in their radio advertising campaign that the HST will create jobs are not supported by the very economist the B.C. Liberals hired to attempt to validate their policy decision,” said Bruce Ralston, New Democrat finance critic, referring to University of Calgary professor Jack Mintz.
The radio ad claims the HST will enable businesses to “hire additional employees and create jobs,” but a 2008 study written by Mintz and three co-authors for the C.D. Howe Institute says the opposite: the introduction of the HST will actually lead to job losses in the first five years, recovering to the previous level only after 10 years.
The report modeled the impact of a harmonized tax similar to B.C.’s HST on the Ontario economy.
“The B.C. Liberal government paid Dr. Mintz to produce a very brief 12-page report in March, nine months after they announced the HST doublecross. The B.C. Liberals have since used that paper to back up their claims, even though it contradicts Dr. Mintz's previous work as well as the warnings of job losses from other experts, including in the tourism and restaurant industries,” said Ralston.
The B.C. Liberal-commissioned report claims the introduction of the HST will lead to 11,000 new jobs in B.C. per year until 2010.
“Mintz and his fellow authors of the 2008 study went so far as to say the introduction of the HST would cause ‘CPI shock’ – Consumer Price Index shock – ‘caused by shifting the indirect tax burden to consumption.’ They go on to explain that ‘employers… respond by cutting back output and reducing their workforce.’”
Ralston wholly rejects the job-creation claims made, but notes that even if they were to be believed, they must be considered within the context of the overall economy in British Columbia. Ralston said that even without the HST, WorkBC, the government agency responsible for tracking job growth, projects job creation in B.C. at 33,750 jobs next year, and a total of 477,000 jobs by 2020.
“Average annual job growth in British Columbia under the New Democrat government of the 1990s was 2.16 per cent. Under the B.C. Liberals it has averaged 1.82 per cent,” said Ralston. “The B.C. Liberals are spending taxpayers’ money to try to convince British Columbians they know what they’re doing with the economy, but the truth is in the numbers.”