Campbell gambles with an HST flipflop

The twists and turns on the HST roller coaster are getting dizzying.
Premier Gordon Campbell delivered the latest sudden change of direction this week.
After insisting the harmonized sales tax is critical to the province’s future and maintaining that he was prepared to pay the political price for bringing it in, Campbell abruptly abandoned that tack.
The Liberals on the legislative committee considering the anti-HST petition rejected an NDP proposal to send the bill to the legislature immediately, one of two options allowed under the act.
Instead, it will go to a referendum next Sept. 24.
The Liberals had signalled they were leaning toward that option.
That appeared to mean the anti-HST effort was doomed.
Under the initiative act, a majority of all registered voters would have to vote to kill the tax for the initiative to go ahead - not a majority of those who voted.
That means some 1.5 million people would have to vote to axe the tax - more than the number who voted for the Liberals and New Democrats together in 2009.
And in the tiny event that the initiative passed, it would not be binding.
The tax, it seemed, was here to stay.
But hours after the committee made its decision, Campbell changed everything. "If people decide they want to get rid of the HST next September, then I guess we'll get rid of the HST next September," he said.
Campbell was more specific. If a simple majority of those who vote in the referendum next oppose the tax a year from now, his government will repeal it.
It’s a remarkable flip-flop and a significant gamble.
What prompted the change? Perhaps Liberals inside and outside caucus convinced Campbell that the party’s bungled handling of the tax - especially its insistence that voters were just to dim to know what was good for them - was doing massive damage.
Perhaps he’s looking to stall recall campaigns against Liberal MLAs by arguing that the public will get a say on the tax.
Certainly Campbell is counting on being able to sell the benefits of the HST - and the complications of removing it - over the next 12 months.
That’s not a sure thing. The Liberals’ actions in bringing in the tax won’t soon be forgotten.
And there is a risk that the effort to sell the tax - with taxpayers’ money or the support of business groups - will backfire.
Meanwhile, expect the political squabbling to continue. Bill Vander Zalm, the anti-HST champion, wants Campbell to bring back the legislature and give his commitments the force of law by amending the initiatives act.
Concerns are already being raised about the referendum question and whether Elections B.C. or cabinet gets to draft it. It’s unclear whether a mail ballot - cost about $12 million - or a polling station approach - cost about $30 million - will be used.
Economically, the uncertainty is bad news. Will a homeowner considering a major renovation start the work next spring or put it off to see if the HST is defeated, cutting the cost significantly?
Companies considering an investment now have no way of knowing what taxes they would pay in the province.
And all this will keep the damaging issue front and centre for another year, taking the Liberals that much closer to the 2013 election.
The change of position on the HST smacks of desperation. But that’s not surprising. Campbell and the Liberals are desperate.
And many are likely realizing how much of this damage is self-inflicted. Rejecting the tax in the election campaign, starting work on introducing it days after the vote, failing to consult anyone, wasting $800,000 on pro-HST flyers and then throwing them in the garbage - it’s been a gong show.
The referendum might buy the Liberals some time. It’s not likely to write them a happy ending to this story.
Footnote: The government got $1.6 billion from the federal government to bring in the HST, which would have to be returned if the tax is killed. About $1.4 billion is budgeted for this year and next. The government would be prudent to remove that money from its budget plans until after the referendum, especially given projections of a smaller-than-expected deficit.