AT a total of 55 to 45 per cent, voters in British Columbia opted to return to the old PST/GST form of taxation instead of the Harmonized Sales Tax. The hated HST was brought in by then-premier Gordon Campbell on July 1, 2009, contrary to an election promise of his three months earlier.
The B.C. referendum was unprecedented in nature and displayed dissatisfaction with more and additional taxes.
The HST is a combination of the PST and GST with a few major differences. Each of the PST and GST has various tax exemptions within them. Under the HST, almost all of the exemptions disappear and pretty much all of consumption bears the full brunt of the combined tax.
The biggest problem with this tax is the sweeping generalizations it makes. It taxes without consideration the necessities of existence. It taxes food, clothing and shelter equally and harshly. Without necessary exemptions in place, it put certain items out of the grasp of some consumers.
In this column, we deal primarily with residential construction, so we will use that as our example.
A unilaterally applied HST in Manitoba would increase the price of the average new home by over $15,000. That is enough to kill a sale and the thousands of jobs that go with the materials and labour associated with it.
We could not withstand an increase of $15,000, especially knowing that it all went into a general bottomless pit of taxes.
Winnipeg and Manitoba are the renovation capitals of Canada. In B.C. and Ontario, the HST increased each renovation project by 2.5% in costs and served to become a tax on a tax. Renovations suddenly became the domain of the underground economy.
Rather than making more money, governments found themselves making less because consumers opted to find people who would do the work for cash, no contract or questions asked.
What does that mean for us in Manitoba? We're not likely to hear a lot about the HST through Oct. 4 when we have our provincial election. Publicly opening the HST window would be a disastrous campaign strategy.
However, that doesn't mean we shouldn't ask for a hard and fast HST platform by all parties. Much like many other ideas, just because something was implemented in B.C. and Ontario doesn't make it a good idea for Manitoba.
Mike Moore is president of the Manitoba Home Builders' Association.
