The debate over the Harmonized Sales Tax (HST) and how it is affecting communities is being debated by many people in the province of British Columbia as referendum packages are being sent out to voters.
One of the issues facing voters is what facts being presented are the ones to sway their vote.
Doug Clovechok is the president of the Columbia River Revelstoke BC. Liberal riding association has said that the way that MLA Norm Macdonald raises questions about the facts he has presented to the people of his riding.
“Nathaniel Hawthorne said that ‘accuracy is the twin brother of honesty; inaccuracy, of dishonesty’ and Norm Macdonald’s latest HST debacle published on June 29, 2011 has nothing but inaccuracies in it and thus, according to Hawthorne, paints him as a dishonest twin,” Clovechok said. “According to Macdonald the HST ‘has resulted in the cancellation of a key funding stream to Resort Municipalities’. To put it mildly this is not true and is disingenuous.”’
Clovechok explained that between 2007 and 2009 the Kootenay communities of Revelstoke, Golden, Radium Hot Springs, Invermere and Kimberley were designated Resort Municipalities each with 5 year agreements with the province and funded through what is known as the Resort Municipality Initiative (RMI).
The original Resort Municipality revenue sharing agreements allowed municipalities to accumulate funds for large projects and when the HST was implemented the Hotel Room Tax associated with the agreements was cancelled.
“This change however has not resulted in “lost funding”, as Macdonald would have you believe, as the province committed to continued funding for the RMI in the 2010 Budget from other government revenues; revenues that are distributed through a grant process.” Clovechok said.
“To date and since the implementation of the HST (July 2010- July 2011) RMI payments through the new process that have been awarded include $448,943 to Revelstoke, $551,408 to Golden, $143,408 to Radium Hot Springs, $231,735 to Invermere and $94,405 to Kimberley. These funds clearly demonstrate the inaccuracy of Macdonald’s statement when he cites that” local communities have been left in the lurch” because of the HST.”
Macdonald has a different view on the effects of the HST on areas like Golden and the others mentioned above.
“What they were able to do with the funding stream before the HST? It allowed them to save up for the bigger projects. There is a mechanics to that type of taxation that allows them to do things like Spirit Square and other signage projects. It was flexible in that way.” he said. “
What the Liberals are saying is that there are grants in place. But what we are seeing through the grants is that they come and they go. If you remember the past year just how many grants were guaranteed that were supposed to be there and just went away,” Macdonald added.
Macdonald went on to explain the current Liberal Government has created a huge fiscal problem and he expects them to be cutting funding in the future.
“The Liberals are asserting that there is some sort of dependability with these grants but there is not,” he said. “What you have done is taken a program that has worked and basically taken it to pieces. It is one of the unintended consequences of the introduction of the HST and is an example of how poorly thought through this initiative was.”
Clovechok sees the changes being made in the HST as something that will benefit many communities in the province.
“In relation to the Municipal and Regional District Hotel Room Tax, the government in Budget 2010 announced the continuation of the two percent tax which in turn provides benefit to about 50 communities participating in the program; in 2009 – 2010 approximately $27 million was raised through this program and the estimate for 2010/2011 is $30 million. This money goes to Resort Municipalities and is being used to finance community facilities such as the new all-season washroom facility and concession at Kinsman beach in Invermere, construction that will begin this fall,” Clovechok said.
From his perspective Macdonald does not see any way under the rules of the HST to use the grant system as a way to replace the hotel tax that was previously in place.
As for the debate over the HST Clovechok said “Macdonald and the NDP are far from the pulse of British Columbians, are not capable of offering accurate HST information and insist on playing partisan politics with people’s emotions. So a word of advice; just being “nice” is no longer working for you Norm as your constituents demand tangible truth; opinion with accuracy brings a far more palatable “twin”, I will be voting NO to extinguish the HST.”
Macdonald feels the idea that he is playing with people’s emotions is not an accurate statement.
“It is absolutely unfair. What people have told me from the beginning is basically the things I have been saying. People here are unhappy with how this tax was introduced and it causes all sorts of problems for communities particularly in this area. We are near the border so we are impacted by the proximity to Alberta. Mr. Clovechok himself has said that the tax has devastated the second home market. We also have the predominance of Resort Municipalities in this area…I can tell you that people here understand the effect of the tax. People here have told me how they expect me to vote on the tax to represent them on this issue and that is what I am doing,” Macdonald said.
When asked about the effects of the HST on secondary homes Clovechok said, “there is no question that HST has had an negative effect on the sale of secondary and recreational properties in CRR, saying different would make me a liar. With that said the government is looking at ways to mitigate the HST effect on new pre HST builds thus putting them back into a competitive position. In terms of the downturn in sales the HST is only a factor in what I call “a perfect storm”. Clovechok said.
He went on to say in his opinion one of the major issues is the fact, “The US is for sale at rock bottom prices and investors that used to look to our area first are looking south for deals that have never been seen before. The recession of 2009 is itself still alive and well, especially in rural areas where disposable local incomes still remain far below the boom years we have experienced. The HST is a new and good tax that needs some creative renovations…I have said that it was not well planned by the former Premier nor was it implemented in a way that is acceptable, especially to the current Premier. As a result she has taken some bold measures to put in some corrections. Properties are still selling including raw lots and land which tells us that the HST is not stopping investors from spending their money in our riding”.