Now available … “HST Math for Dummies”

Yesterday in the Vancouver Sun, columnist Don Cayo had a brief story entitled “The HST’s total impact on BC prices well under 1%”.  The following two paragraphs are the story in its entirety:

What might he be saying? Perhaps,"I think
the effect of the HST will be about this much"

The impact varies according to your income and spending habits, but for the average British Columbian the impact of the HST has been less, according to a just-released study, than most experts predicted. And much, much less than many of the tax's critics have claimed.

Jon Kesselman, the Canada Research Chair in Pubic Finance and Simon Fraser University, has calculated the overall impact on the price of consumer purchases at 0.6 per cent, based on StatsCan data on price changes and spending patterns, and factoring in inflation.

I guess perhaps columnists for the Vancouver Sun make enough money they can just kiss off any increase the provincial government decides to throw at us.  Stating that the impact of the HST has only amounted to an increase of .6% of course does make it sound very small … but let’s look at this in “real” dollars and cents.

The Business Council of British Columbia had a document prepared which looked at the “Consumer Impacts of BC’s Harmonized Sales Tax”.  It stated that:

Using Statistics Canada’s monthly survey of BC prices through December of 2010, I have been able to compute the first estimate of the HST’s actual impact in BC.   My analysis of the consumer price index (CPI) finds that the HST resulted in a 0.6 of one percent increase in overall consumer prices in BC.   This finding indicates that the average consumer is now paying just one additional dollar for every $165 of spending.   My estimate is relatively robust to variations in time period and methods of controlling for inflation, and it matches another study’s estimated 0.6 of one percent CPI impact for Ontario’s HST.

Sure … when written down like that it sounds like a drop in the bucket -- certainly nothing to quibble about right?  But is it?

Statistics Canada says as of 2008 (last date available) the average BC “couples” family income  was $74,070 … and again the author of the Business Council of BC summary said the HST was costing us an additional $1 for every $165 spent.  

I never was very good in math in my later years of high school; however I am sure that .6%, in REAL dollars, would be equal to $448.91.  ($74,070 divided by 165 = $448.91).  Again Don Cayo apparently seems to think that’s a small amount -- BUT it isn’t to our family; what about yours?

On September 14^th, 2010 Finance Minister Colin Hansen said that the British Columbia government was committed to acting on the result of a province-wide vote on repealing the HST.   Soon to be retiring Premier Gordon Campbell also stated that a simple will of the majority (50% +1) would be all that was required to repeal the HST.  The date of that vote, unless changed by whoever becomes the next leader of the BC Liberal Party, is to take place on September 24, 2011.

I am hoping that the way Cayo described the effect of the HST so far was a simple oversight.  I say that because regardless of whether you feel it’s best to continue with the HST, or go back to the old PST / GST combination, trying to confuse people with mathematical HST mumble jumble will see the people of BC stirred up to an even greater wrath than we saw when the HST was first announced.

I’m Alan Forseth in Kamloops, and those are the thoughts of one conservative.