HST in the news again

According to the BC Hansard, last November 23 Finance Minister Colin Hansen (right) said that "...the most important piece of information that I saw in the middle of May was a chart that shows the marginal effective tax rate on investment province by province..."

What I find interesting about this is that that chart was generated by Finance Canada as opposed to Hansen's own department. I have included such a chart in my own blogposts before, and I took it directly from the federal department's website. Indeed, in response to a question about the chart's origin from NDP finance critic Bruce Ralston, Hansen stated that "the table .... was prepared by the federal Department of Finance." This was a federal initiative that the province happened to find convincing.

Of current interest to most British Columbians, however, are portions of the rest of the exchange that November afternoon between Hansen and NDP finance critic Bruce Ralston:

Hansen: ... we were [not] in discussion with the federal government with regard to harmonized sales tax [at the end of March 2009 when Ontario announced its 2009 budget].

Ralston: ... from ... January 2009, until after the election ... there was no discussion either by the minister or his officials of the implementation of an HST. Is that the minister's position then?

Hansen: That is correct.... The very first indication that anyone in the federal government would have had that British Columbia was reconsidering its previous opposition to the HST was ... at the end of May. It was only subsequent to that that there were discussions that commenced at the officials level.

This week, emails between BC Ministry of Finance officials and Finance Canada were revealed which some media sources are saying "show that talks between staff in Ottawa and Victoria began on March 26, 2009."

In fact that emails don't show that. On the afternoon of March 26 the acting ADM of Finance Canada's Tax Policy Branch, Louise Levonian, emailed all four provinces that had not indicated an intention to harmonize (BC, Sask, Manitoba, and PEI) saying "I am available to discuss." The BC Finance official who received the email, Glen Armstrong, had earlier advised other BC officials that Levonian had indicated that she was available for a meeting the next day "if we think we need a meeting." There is no indication that any such meeting occurred. Levonian emailed Armstrong again on May 11, the day before the BC election, and Armstrong responded with a substantive question, but even if that minimal exchange constitutes "discussion", this occurred in mid-May, contrary to the media claim that "talks ... began on March 26." Furthermore, Armstrong's response to Levonian's email is hardly evidence that "British Columbia was reconsidering its previous opposition to the HST" coming as it did from an official whose job it is to keep on top of his files as opposed to a politically responsible minister.

With respect to discussion internal to the BC government, I'd first note that internal discussion does not contradict Hansen's remarks, above. It is true that on March 27 Armstrong sent an email to another provincial official saying that the minister should be given an updated brief on harmonization issues in light of the Ontario experience. There is, however, no evidence (in these emails) that the minister solicited this. The memo, or an update to it, may be seen as part of the ministry's general responsibility to keep its minister briefed on the developing issues the ministry identifies.

This isn't to say that there isn't a real issue when a political party makes a major policy move shortly after forming government that it had not campaigned on. It is rather to say no significant evidence has yet been revealed that indicates that the BC Liberals were planning to implement the HST and just hid those plans during the campaign. Minister Hansen's contention is that after the election it was then time to think about long term policy and a consequence of that think was the HST. I see no reason to doubt that aside from the natural cynicism that one may reasonably have about politicians and politics in general. If I am not inclined to indulge that cynicism it is because I have worked on the inside of a finance ministry and seen the extent to which the general public is inclined to a conspiratorial mindset that distorts perceptions of how policy is developed.

I do think the BC Liberals hurt the cause of investment friendly (and therefore consumption "unfriendly") tax reform by not at least musing about the possibility of harmonization during a political campaign. They could have done what Ted Morton has done in Alberta and mentioned it as something that warranted further study and that should not be ruled out. But the BC Liberals are not to blame for the FUD spread by Bill Vander Zalm and his NDP allies. Hansen made it clear that his government was getting about $5 billion in revenue with the old PST and will collect about $5 billion under the new HST regime such that it is a tax reform, not a tax hike.

There was a time when it was the political left that had little time for abstraction, laying charges like "that's racist" or what have you based on an immediacy of perception such that appeals to sophisticated argument at all removed from subjective, unfalsifiable "feeling" were summarily dismissed. Today it is the ascendant political right that has no time for concepts that cannot be reduced to a slogan. Self-styled "conservatives" have hijacked and even destroyed essential conservatism by upending its traditional emphasis on responsibility in favour of a self-indulgent demand for tax cuts. Spending cuts are an afterthought, and on the rare occasion when meaningful attention is paid, the typically "conservative" conclusion seems to be that it is spending that affects others, like the young, that should be put on the chopping block. The locus of reference remains circumscribed to me, myself, and I, which I could sympathize with as someone who salts his communitarianism with respect for the individual were it not for the fact that the reference point is not only metaphysically constrained but chronologically constrained: what's good is good for me AND good for me NOW. Saving for tomorrow? That's so yesterday.

Canadian Teabaggers

America's Tea Party protests migrated north of the border today as former SoCred premier Bill Vander Zalm was found leading the masses in protesting British Columbia's introduction of the HST (a harmonization of provincial and federal sales taxes).

I won't go over all the economic arguments in favour of the HST, since a lot of people are already aware of where the expert consensus is. The question is how one reacts to that. As "Andre Jean" on the Globe and Mail's website puts it in responding to the comments of another (italicized):

I'm not sure I would trust the public at large to really understand these issues.... According to just about every economist [Liberal Premier Gordon] Campbell is doing the right thing

I don't think that this is the point. What are we? A democracy or an expertocracy? Why bother having elections? Why not leave it to the professional organizations of economists, engineers, doctors, lawyers, et al. to set public policy?... Might as well leave it to the expletive deleted think tanks to run the show.

Well, Andre, if you are looking for refuge from an "expertocracy", Ed Stelmach's Alberta is your shelter from the storm!

It's arguably unfair to American Teabaggers to compare them to Vander Zalm's mob because the US demonstrators are calling for lower government spending, a very sound policy (although not so sound is the number of Birthers, Deathers, Tenthers, etc in their ranks). This Vancouver protest has nothing to do with spending and everything to do with whether the tax burden is transparent and efficient (paid by consumers) or obscured and inefficient (paid by producers).

According to Les Leyne of the Victoria Times Colonist

The blame -- or credit -- for the Return of the Zalm falls squarely on one man -- my friend Vaughn Palmer of The Vancouver Sun.
It was Palmer who invited Vander Zalm on to his Voice of B.C. TV show in June. The topic was his absurd 645-page, self-published [and self-edited] book ... The appearance gave Vander Zalm his first taste of publicity in years. TV is like crack to him.
That appearance likely brought in enough gushy e-mails from long-dormant Socreds living on the outskirts of Crazytown that it reawakened his taste for being in the news. So it's no coincidence that, several weeks later, he pops up at the front of the angry mob, ready to lead a populist charge in all directions.

Vaughn Palmer responds by noting that he could hardly be conspiring for the return of someone who had such a "dismal and disturbing record as premier":

Denounced by the New Democrats of the day for trying to impose his religious beliefs on the province by cutting off funding for doctor-approved abortions. Accused of presiding over one of the most ethically-challenged administrations in history.
Found guilty of multiple violations of conflict-of-interest standards over the sale of his property to a Taiwanese billionaire.
Persisted in his actions (to quote from the Ted Hughes-authored review of his conduct) 'because of the apparently sincere belief that no conflict existed so long as the public was not aware of what's going on.'

There is a lesson here for Alberta social conservatives, and that's that one has to be discriminating in terms of whom one is backing. Vander Zalm had already alienated Indo-Canadian supporters of his anti-HST crusade by declaring that multiculturalism is destroying the country. Now I happen to believe that Vander Zalm's lament about multiculturalism and the decline of religion, and in particular his remark that "[w]e’re trying to accommodate all people, and in the process losing everything" is a message that should be taken seriously. The problem is that this messenger cannot be taken seriously.

The biggest warning flag that the Zalm is not, in fact, advancing "true conservatism" is the fact that he is in league with the NDP. Today Vander Zalm introduced Carole James saying the NDP leader was “doing a great job.”

Lately I've been asking supporters of Mark Dyrholm to consider Dyrholm's campaigning on behalf of Ed Stelmach's PCs. How does that square with Dyrholm being a "true conservative"? Is Vander Zalm, who wears his "conservative Christian beliefs" on his sleeve, a "true conservative"? Then what's he doing on a stage with the NDP? Even if one thinks the Stelmach PC party is "conservative", surely we can agree that the "label" does not belong on the NDP.

"[C]onservative Christians" ultimately retard the cause instead of advancing it by following a demagogue who "pops up at the front of the angry mob, ready to lead a populist charge in all directions." Everytime this happens, the judgment of the followers is called into question. As Vaughn Palmer notes with respect to the NDP leader: "you have to wonder what she is saying about her own standards."

The fact is that "conservative Christian" values do not have to be packaged into a single football and handed off to a self-promoting politician who showboats for the crowd and then fumbles it. One can advocate on an issue by issue basis, like the Evangelical Fellowship of Canada does, and be far more effective.