HST saga gets still worse for the Liberals

No matter how much Finance Minister Colin Hansen and Premier Gordon Campbell protest, few British Columbians will believe their claims the harmonized sales tax was “not on our radar” in advance of the May 2009 election.
The latest blow comes from documents released this week under a Freedom of Information request.
Briefing notes for Hansen and reports and e-mails between Finance Ministry managers support one of two conclusions: Either the HST was on the government’s agenda before the campaign, or it so obviously should have been that their competence is doubtful.
The Liberals were asked about the HST during the campaign. They responded, in writing, that “a harmonized goods and services tax is not something that is contemplated in the B.C. Liberal election platform.”
But within weeks of the election, Hansen was discussing an HST deal with the federal government.
Campbell and Hansen insist they only discovered the need for the HST in the days after they were elected.
Hansen said he hadn’t paid attention to Ontario’s decision to bring in the HST — first suggested in January and formally announced in the March 25 budget — because the election was looming. (He said later that Ontario’s adoption of the tax made it absolutely necessary for B.C. to do the same.)
But surely he didn’t quit paying attention to a major tax-competitveness issue months before the vote. Even the Ontario budget came eight weeks before B.C.’s election day and long before the Liberals assured concerned business groups they wouldn’t bring in the tax.
Especially since the FOI documents include a heavily censored briefing note on Ontario and the HST sent to Hansen March 12, two months before the election. That was followed by another briefing note after the Ontario budget.
Hansen said he might have glanced at the briefing notes, but didn’t register the significance of Ontario’s tax change. That’s surprising; Hansen has always been remarkably in command of the details of his portfolios.
The FOI documents raise other questions.
Campbell told the legislature that B.C. officials did not even discuss the HST with their federal counterparts until well after the election. Hansen said the same thing in answer to a specific NDP question. There was absolutely no contact of any kind between federal and B.C. officials until late May, he said.
But there was. The documents show discussions and e-mail exchanges between the B.C. officials long before the campaign began.
Hansen’s explanation is that he did not know any of this when he answered. Anyway, he said, officials should be talking to their federal counterparts about tax changes.
And the documents show the government was selective in releasing information on the impact of the tax. The documents support the contention that the $1.9-billion tax shift from businesses to individuals and families would bring growth in the long term.
But they also forecast a short-term loss of jobs and economic activity. It could take more than five years before wages and jobs recover, says a report from the C.D. Howe Institute.
Hansen says that information is out of date; changes negotiated in the HST implementation reduced the problems. The government has yet to release an analysis supporting that argument. Other reports, he notes, have been more positive.
Finally, the documents include a transcript of Hansen’s HST comments in a radio interview before the election campaign. “It’s clearly a controversial move and one that we would certainly want to get a lot of input on,” he said.
But the government didn’t seek any input. Even Liberal MLAs were kept out of the loop. There was no consultation or analysis. The option of delaying the tax for a year to allow those things was not considered.
And the Liberals are paying a huge price.
Footnote: The documents topped the news reports in all the major media in the province on Thursday, thanks to another government bungle. CBC Radio reporter Jeff Davies submitted the FOI request. The government said it would charge $800 to produce the material. Davies approached seven other news outlets to split the cost and all receive the documents at the same time. The result was an avalanche of bad news.