Bruce Ralston is the hunter, Colin Hansen the quarry.
2010 Legislative Session: Second Session, 39th Parliament
DEBATES OF THE LEGISLATIVE ASSEMBLY (HANSARD)
COMMITTEE A BLUES, TUESDAY, MAY 18, 2010, Afternoon Sitting
ESTIMATES: MINISTRY OF FINANCE
Hon. C. Hansen. . . . What that response stated quite clearly in those surveys is that the HST was not contemplated in the B.C. Liberal platform, and that is an absolute factual statement.
B. Ralston: Well, the responses to the questionnaire were a little bit broader than saying simply: "It's not contemplated." The B.C. Restaurant and Foodservices Association reported in their response…. I'm quoting here from the response of the minister's party talking about why the party would not harmonize the PST with the GST.
"It would extend the PST tax base to a broader range of goods and services that are presently exempt from the provincial sales tax…. This is a major concern. The B.C. Liberals are also mindful that a harmonized GST would reduce the provincial government's ability to unilaterally adjust sales tax rates." In short: "A harmonized GST is not something that is contemplated in the B.C. Liberal platform."
It wasn't a question of just saying it's not there. It was a question of a series of responses that cast doubt on the wisdom of the policy and made it very clear that as a logical consequence of having doubt about the premises of that policy, it would not be implemented. So is the minister saying that he doesn't stand by that promise, that he never regarded it as binding on the party and that in the future any promise made in those circumstances should be disregarded as having no value?
Hon. C. Hansen: I repeat: there was never a promise made by the B.C. Liberal Party or anybody speaking on behalf of the party that the HST would never be brought in. What it said was that the HST was not contemplated in the platform, . . .
B. Ralston: Well, certainly the minister has offered an explanation of a sort of what was said and what was promised in this response to the questionnaire. But others interpret it much in the manner that I'm interpreting it, and I think that perhaps most notably, Ian Tostenson, who was the president of the B.C. Restaurant and Foodservices Association.
He wrote an open letter, and in that letter just after the HST was announced on July 23 — and I'm going to quote from the letter — he said: "Last week the Minister of Small Business told me that all impacts of harmonization would have to be considered before any implementation would be contemplated. What a difference seven days make. In my opinion, this was a Ministry of Finance decision based on billions of dollars of incentives that the federal government grants to participating provinces." He was completely surprised, based on the assurances that had been given to him in writing before the election, and expressed his surprise and outrage in this letter.
. . . There seem to be a number of people who didn't agree with the interpretation that the minister is now offering. They thought it was a simple promise not to do it and if it was going to be contemplated that there would be a consultation process, not a single announcement, as there was on July 23.
. . . I would say that it's very clear, I think, to most people, whether in the media or members of the public, that a promise was made not to implement the HST without consultation. That promise was broken on July 23, and that's part of the reason for the anger of the public ever since.
The minister can choose to reject that if he wishes. That's his right, and I suppose that'll become part of the public debate in the future.
Now, the Premier said on July 23 that the HST was the single best thing that could be done for the B.C. economy. Does the Minister of Finance still support that view?
Hon. C. Hansen: Yes.
B. Ralston: Can the minister explain why he still regards that one policy alternative, notwithstanding all that's taken place since July 23, as the single best thing that could be done for the B.C. economy? When one comes to look at economic policy, there's a broad range of alternatives available, certainly in debate. Other jurisdictions have taken a different route to what they regard as economic prosperity. So can the minister explain why he stands by that position?
Hon. C. Hansen: . . . You know, you can look back over the last ten years of B.C. history, and there was probably not a time when the adoption of this value-added tax is more compelling than it is now, given the fact that we are in the early stages of recovery. There are literally trillions of dollars of investment globally that are looking for a home, and we want to make sure that that home is British Columbia.
B. Ralston. . .. When did the minister become convinced of this very emphatic view that he's advancing — that this is the single best thing that could be done for the B.C. economy?
Hon. C. Hansen: During the second half of May last year. . .
B. Ralston: Was the HST as a policy alternative mentioned by the Premier or by the minister himself at this meeting on May 14, 2009?
Hon. C. Hansen: No.
B. Ralston: Why not?
Hon. C. Hansen: The subject did not come up.
B. Ralston: Well, as the minister knows by now, the following day, on May 15 — according to a freedom-of-information request tabled by Canadian Press and responded to — the provincial head of tax policy contacted his federal counterpart to request information about the HST. That's a fairly high-level discussion between officials following immediately upon the meeting between the Minister of Finance, the Premier and the Deputy Minister of Finance.
Is the minister saying that he, in that discussion, played no part in that inquiry being made, that it was simply a coincidence that one day later this inquiry was made of the federal government?
Hon. C. Hansen: Yes.
B. Ralston: I'm sure that the minister can appreciate why it might be difficult for some to accept that. . .
Well, I'm glad there's an exception to the policy that the minister has just enunciated, at least to issue a denial. I suppose that kind of logical conundrum is the corner which the minister has retreated to.
The minister says that the issue of the flexibility of the federal government did not arise until his discussion in late May 2009. Was the minister not aware of the position that the federal government took in their January 2009 federal budget? I'm quoting from the budget document: "Provincial retail sales taxes, RSTs, are outmoded and inefficient…. Modernizing these harmful taxes by implementing a value-added structure harmonized with the GST is the single most important step that provinces with RSTs could take to stimulate new business investment, create jobs and improve Canada's overall tax competitiveness." There's that "single most important" phrase again.
That was set out in January 2009. Was the Minister of Finance not aware of that? Because he claims that he first became aware of federal government flexibility, as he calls it, only at the end of May 2009.
. . . Indeed, the Premier himself was in Ottawa for the federal budget, to listen to the budget. Is the minister saying that there was no discussion between himself and the Premier? I appreciate this might be what he regards as a private conversation. Frankly, I think it's a matter of public policy — but no discussion between himself and the Premier when the Premier returned from Ottawa or, indeed, while he was in Ottawa to listen to the federal budget about this initiative of the federal government?
Hon. C. Hansen: We had discussions about the federal government. The subject of the harmonized sales tax did not come up.
B. Ralston: In the budget document, the "Federal-Provincial-Territorial Collaboration" section states the following: "The government remains committed to working with the provinces that still have RSTs to identify and evaluate potential areas where changes to the current framework for federal-provincial harmonization could facilitate provincial movement towards the creation of a fully modernized and efficient consumption tax system in Canada."
Was the minister aware of the offer of changes to the current framework? Was that a subject of discussion between himself and the Premier while he was there in Ottawa listening to the federal budget? I believe he met the Prime Minister. Obviously, this was high on the list of priorities for the federal government. Was there no discussion that was reported to him by the Premier of potential changes and the implementation of an HST?
Hon. C. Hansen: None.
B. Ralston: The Minister of Finance seems very emphatic on that. Has he checked his notes or consulted with his officials about any meetings that might have taken place upon the return of the Premier from listening to that budget in Ottawa?
Hon. C. Hansen: I will repeat it again. I talked to the Premier about the federal budget and his trip to Ottawa and some of his discussions. The subject of the harmonized sales tax did not come up.
B. Ralston: The other event that took place earlier that year, prior to the budget, and led to the policy that's now being implemented in this fiscal year and, therefore, the subject of these estimates was Ontario's decision to move to the HST. Is the minister saying that once again there was no discussion with either himself at the ministerial level or his officials at his direction in Ontario about the implementation of the HST there?
Clearly, we moved from an offer of federal government flexibility in the budget of January 2009 to an acceptance and negotiation by Ontario. The minister has been very insistent on the importance of this move by Ontario. Was there no discussion as a result of that shift? The federal government makes the announcement. Ontario announces they're considering it and ultimately implements it in their budget that spring. Again, no discussion by the minister with anyone in Ontario, either by himself or officials at his direction?
Hon. C. Hansen: There were none.
B. Ralston: The minister, then, is saying that the policy to shift to the HST or even consider it came as a bolt out of the blue at the end of May after this fairly wide-ranging national debate at both the federal level and at the Ontario level — and it became a subject of considerable public discussion in Ontario.
Is the minister saying that he participated in none of that? There was no discussion, and nothing happened. He wasn't even aware of it, didn't ask officials to report to him. Then only at the end of May did he become aware that there might be a possibility of this debate taking place. Is that his position?
Hon. C. Hansen: Yes.
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