INDUSTRY leaders on the North Shore are divided both in their reaction to the HST referendum result and in what they think the province should do next, but they agree a return to the old PST system probably isn't the best option.
"Our reaction is mixed," said North Vancouverite Ian Tostenson, president of the B.C. Restaurant and Food Services Association. "Restaurants had a new tax applied through the HST. So the prices (will) come down and that should be good, and obviously when the consumer has more money in their pocket, that should be good for restaurants."
However, Tostenson acknowledged that a sales tax like the PST is a burden for several of the province's other major industries and said he doesn't oppose a value-added tax in principle.
"We said HST was good for the economy as a whole, but bad tax policy on food. Restaurant food competes with retail store food, and retail store food didn't have tax on it, so we had an untaxed competitor. All we were asking for is tax fairness."
A new system, said Tostenson, "could mirror some of the tax exemptions that businesses got under the HST. If there are businesses that need some support, whether it's the movie industry or the lumber industry, you can give them that."
"What happened in the HST debate was that some were winners and some were losers. We can't have that any more; we all have to win. We are naive in our industry to think if we don't have strong industry around us that we're going to have a strong restaurant industry."
While he urged the province to bring in changes faster than the 18month time frame described by Finance Minister Kevin Falcon, Tostenson said the current economic climate isn't the best environment for a discussion of tax policy.
"I think a value-added tax is tough to bring in during a recession. I'm convinced now that the taxpayer has gone into the singular mode, that it's all about me. They can't control governments around the world, so everyone's hunkered down and become very inward-looking with their own finances. If you asked them to pay more, they just don't get it."
Peter Leitch, president of North Shore Studios and chairman of the Motion Picture Production Industry Association of B.C., said he was disappointed with the results of the vote. Leitch was also a cochair of the pro-HST Smart Tax Alliance.
"Certainly we accept what the voters have done," he said. "But we think it has dug a bit of a hole in the B.C. economy. It's going to cost the government around $2.7 billion, and they're going to have to recover those funds elsewhere: cutting spending or increasing taxes. I think it's unfortunate with the world economy at risk right now. . . . With our industry specifically, it's going to have a significant impact."
Leitch noted the vote results had been discussed in a recent Hollywood Reporter article that suggested the tax shift would likely drive U.S. productions to Ontario. Leitch estimated that a return to the old PST could affect as many as 20 per cent of the jobs his business supported. Provincewide, the film and television industry is responsible for about 35,000 jobs.
"Those are the production jobs we're looking to protect. It's the projects, the feature films and television series that we want to keep getting. If we lose one television series that's going to last five years, that's 200 people out of work for five years. That's really unfortunate."
While Falcon has said he plans to simply return to the original PST regime, Leitch said he hopes the provinces takes its time and develops another plan.
"Even the Fight HST people understood that the PST was not a good system," he said. "They always talked about a third way, and we're very interested in having that dialogue about what that might look like. . . . If there are changes we can make to the PST, let's do that before it's introduced. We've got 18 months."
