It's hardly the kind of decisive victory the anti-HST movement would have expected a year ago, but 55% of British Columbian have voted to replace the HST with the GST and PST.
One immediate consequence of this is that Christy Clark and Jim Flaherty will need to come to some kind of deal over how much federal HST compensation the province keeps. Given their respective political situations, one imagines Flaherty holds the better bargaining position.
The more interesting fallout will be what impact this has on the next BC election. Even though the Liberals "lost" today, this takes a big issue off the table for the NDP.
Ontario was hit with an earthquake today, but the real question people are asking is whether or not the earth will move on July 1st. That's when the HST will be implemented - how Ontarians react may very well decide who wins next year's election.
Tim Hudak, who used to think the HST was a nifty idea and probably still does deep down inside, has spent the last year crusading against it. Twelve of the twenty press releases he's put out in June have specifically mentioned the HST. It's abundantly obvious Hudak wants to make the next election all about the HST, as he tries to become Ontario's version of Bill Vander Zalm.
McGuinty, meanwhile, has fought back with a TV ad:
In it, Dalton sits in the backyard and talks about the HST, calling it "strong medicine". I guess they've gone the Buckley's route on this one - "It tastes awful. And it works".
So it's cough medicine up against cotton candy. While voters generally prefer cotton candy, the Ontario Grits appear to be gambling that voters will trust the guy telling them the cough medicine will make their cough go away more than the guy telling them cotton candy will work just as well. That's why McGuinty is being featured prominently in the ads. Make him look like a strong leader who makes tough choices. He's the decider.
Personally, I don't doubt for a second the HST is good policy. Every expert says it is. Hell, Jim Flaherty says it is and he won an award for being the greatest Finance Minister ever or something like that.
Moving beyond all the rhetoric, I think it's clear some people will come out ahead and some will wind up behind. Some things will cost more and more will cost less. Why I think the province as a whole will come out ahead is that it will eliminate a lot of inefficiencies.
Revenue Minister John Wilkinson, who has the unenviable job of selling the HST, has a great anecdote about this. Currently, hospitals pay PST on bathroom supplies for visitor bathrooms...but not for patient bathrooms. So the Ontario government is literally paying people to inspect how toilet paper is used. He jokes about money being flushed down the drain, but I can think of more colourful metaphors to use.
It's for reasons like that I feel this will be a good move for Ontario on the whole. Politically, it all depends on whether Ontarians are willing to hold their noses and swallow the Buckley's.
“We got the message out on the impact of HST,” Ottawa West-Nepean Conservative MP John Baird said. “With 28 days, no one gave this party, no one gave Tim Hudak, and no one gave Beth Graham a chance at winning.”
2. Another study is out, once again showing that, contrary to popular opinion, the HST will not be the trigger event that leads to the end of the world in 2012.
Glad to see this. This is how a serious opposition party behaves - it's a good policy, even if it's politically unpopular, so I'm glad to see the Liberals backing it:
OTTAWA - Liberal Leader Michael Ignatieff said Tuesday his party will support legislation enabling Ontario and British Columbia to harmonize their sales taxes with the federal GST.
The Bloc Québécois says it will “probably” support a Conservative motion next week on the harmonized sales tax, a move that would give the government the votes it needs to move ahead with the plan.
The Bloc’s support will be welcome news to the premiers of Ontario and British Columbia, who have campaigned hard in favour of the tax change scheduled to take effect July 1.
Bloc House leader Pierre Paquette made the comments to reporters on Friday outside the House of Commons.
The Bloc’s support would also take some of the political heat off of Liberal MPs, who have been put in a political bind by the imminent motion. Several Liberal MPs have been vocal critics of the tax change, but voting to kill the measure risks alienating the Liberal party’s provincial wings in the two provinces.
If the Bloc do vote in favour of the HST, the bill will go through, much to the public delight of the BC and Ontario Premiers, and much to the private delight of the opposition leaders in those two provinces.
However, Ignatieff will still need to take a position on this issue and anyone who has watched him over the past year will agree that's still a powerfully problematic pickle for the Liberal leader.
Ignatieff basically has three choices:
1. Vote in favour of the HST: He's decisive, he's a "serious" politician...but the NDP get to whack him for supporting a policy few voters like.
2. Vote against it: The Liberals get a populist issue to attack the CPC with ("tax on everything!") and rally voters to their cause...but get accused of flip-flopping, and alienate provincial Liberals.
3. Allow a free vote: Caucus stays happy, he avoids pissing anyone off...and comes across looking like a man unable to make any sort of decision. And, oh yeah, he still needs to vote himself so see points 1 and 2.
D'oh!
Personally, I hope he chooses option 1, if only because the HST legislation is good policy and that should count for something, right? Right?
Although "poison pill" probably deserves to be added to the "overused political words" list, here's the latest on a possible poison pill:
The Conservative government plans to bring in legislation connected to the harmonized sales tax in the coming months, giving it the tool to bring about its own demise should Prime Minister Stephen Harper wish to capitalize on the Liberals' current misfortunes.
Government officials confirmed that the agreements under which Ontario and British Columbia will harmonize their retail sales tax with the federal goods and services tax call on Ottawa to bring forward HST legislation by March 31, 2010.
It seems obvious the Bloc would vote against this. The NDP would have a hard time supporting this but, you never know, maybe Jack will meet an unemployed single mother in Sudbury who pleads with him to vote for it, prompting a change of heart. Because, gosh darn it, he's thinking about the people!
But, failling that, the fate of the HST legislation would lay squarely in the hands of the Liberals.
Which would be, to put it bluntly, rather awkward. Having already split the party in Quebec, going to the wall against the HST would risk alienating many provincial Liberals in Ontario and British Columbia.
Which explains the rather...I guess the polite word would be "nuanced" position, that Michael Ignatieff has taken on the HST. In short: he's against it, it's a bad idea, but he'll honour the deal between Flaherty and the provinces.
So, given that, how do you vote against a piece of legislation you've promised to honour? Then again, how do you vote confidence in a government you've explicitly said you don't have confidence in? Presumably the Liberals will need to find an answer to one of those questions, unless Flaherty rolls the HST up into his next budget.
It's also a dicey situation for the Tories who probably don't love the idea of framing the election around their support for what is widely perceived to be a tax increase. After all, that makes it a lot harder for them to go on about Michael Ignatieff's secret plan to raise taxes.
