Dear Editor:
Garrett Polman hit the nail on the head in his July 10 letter HST 'Fix' Will Have to be Paid for by Other Means. Yes, the cut in the HST rate from 12 per cent to 10 per cent will have to be made up elsewhere, if the province is not to plunge further into deficit.
As Mr. Polman also points out, part - but not all - of the proposed solution will be to raise the tax on corporate profits from 10 per cent to 12 per cent, and we will also have to postpone the planned small business tax rate reduction. Business is asked to grit its teeth, help restore fairness to the tax system, while preserving the undoubted efficiencies of the HST for the business sector.
The four North Shore MLAs voted "No" to the plan to dump the HST. The phase-in to a 10 per cent HST rate is now federal law. Will consumers still be taxed more on services and restaurant meals under the "new" HST? Yes. But with the rate reduced from 12 per cent to 10 per cent most consumers will pay less tax overall than under the original combined 12 per cent GST and PST. Will rebalancing solve all of the lost revenue problem? No. Again as Mr. Polman correctly points out, there is still a sizeable hole in the budget.
But a return to the GST-PST would create an even bigger $3-billion hole in the budget. Either way, Finance Minister Kevin Falcon is forced to dip into his contingency reserves and look hard at all other spending areas, as he drives toward balancing the government's books in 2013-14. If we want all those government services, including health care and education (not to mention grants to community organizations), they must be paid for somehow or reduced in scope. As Greece, Italy, and the United States - as well as Mr. Polman - all demonstrate, there is no free lunch in government.
Jane Thornthwaite, Joan McIntyre, Naomi Yamamoto, Ralph Sultan North Shore MLAs
