Switching out the HST for the PST will cost BCers $5 Billion, or, actually, it won't. The Globe and Mail a national newspaper just made a billion dollar miscalculation.
The Globe and Mail erroneously reported in two seperate online articles that new documents it obtained suggest switching back to the Provincial Sales Tax (PST) from the Harmonized Sales Tax (HST) would "cut $5-billion in annual revenues for B.C." The five billion dollar price tag is staggering, it would be more so if it was true.
The Access to Information documents that the Globe and Mail articles cite contain no reference that switching the PST with the HST would cost $5 Billion, instead the files clearly detail how cutting the HST without replacing it with any other tax would lead to that extraordinary sum.
The documents which serve as the basis of the Globe's articles clearly associate the billion dollar price tag to a tax system without the HST and the PST. On page 6 of the PDF document, while referencing an outcome where there is no HST or PST, it states,"$5 billion in annual HST/PST revenue would have to be replaced." The Globe seemingly overlooked this fact that the five billion dollars was lost revenue from the HST or PST.
The Globe's error is made all the worse when one considers that the documents clearly list alternatives to the HST, and after excluding reinstatement of the PST go on to describe possible policies to make up for lost tax revenue.
The Globe and Mail made a billion dollar miscalculation in reporting that cutting the HST while reinstituting the PST would cost five billion dollars. The Globe's documents attribute that five billion dollar cost to axing the HST while not replacing it with the PST. And that cost in itself is completely meaningless seeing that the referendum question that will decide the fate of the HST mandates that the PST would replace it.
The CBC has also reviewed the same newly released documents and also contradicts the mistaken Globe. The Canadian Broadcasting Company reports, "Internal provincial government documents lay out a number of grim scenerios, the worst of which shows that if the HST is eliminated and the PST is not reinstated."
The Globe and Mail in one article falsely reports:
Finance Ministry documents obtained by The Globe and Mail this week suggest the ministry believes that completely axing the HST to bring back the former provincial sales tax would cut $5-billion in annual revenues for B.C. and force program reductions as well as “dramatic” increases in income tax and other levies.And in the other article the Globe mistakenly states:
Completely axing the controversial harmonized sales tax to bring back the former provincial sales tax would cut $5-billion in annual revenues for B.C. and force program cuts as well as “dramatic” increases in income tax and other levies, according to Finance Ministry documents.The Globe is wrong, the documents do not say getting rid of the HST and returning to the PST will cost five billion dollars. Only if we lose the HST and the PST will British Columbians incur such a cost and considering that if the HST is defeated in the 2011 referendum the PST will return, it makes this billion dollar cost pointless.