Campbell’s plan to “harmonize” PST with GST another attack on BC’s working class

Gordon Campbell’s BC Liberal government has just announced that they will be breaking another election promise. They’ve announced plans to “harmonize” the GST and PST. After specifically saying during the election campaign that such a move would be a major concern and that they had no plans to do it, the Liberals have gone back on their word. They have decided to increase taxes by seven percent on a whole range of things, from Hydro bills to most food items. This tax will again, disproportionately hurt poor and working people and will actually be a drag on the economy.

Many basic goods and services are exempt from provincial sales tax. This was designed to prevent unfair burden being placed on working class people whose budgets are tight already. But Campbell’s latest move will see the sales tax applied to restaurant meals, home phone bills, BC Hydro bills, heating bills, most food items, school supplies and a host of other basic items. It is said that the only certainties in life are death and taxes; this expression takes on new meaning as Campbell’s new tax will even be applied to funerals!

The tax will also be applied to new homes that cost over $400,000. The Campbell government’s short sightedness is staggering. The average price of a home in British Columbia is expected to fall to $416,000 in 2009. This new tax will effectively add about $30,000 to the cost of the average house. It will also put downward pressure on the value of homes as new buyers will bid down prices in an attempt to get them under the $400,000 mark. In the short term, it may lead to a scramble to sell properties before the tax is implemented, but in the long term it will only put negative pressure on the market. In the middle of a real estate crash, and the collapse of the construction industry, Campbell’s ill-conceived plan could wreak havoc.

This is clearly an attempt to squeeze even more money from the working class of British Columbia. With the government running a massive deficit, the Liberals are attempting to balance the budget on the backs of the poor and working class. We predicted a new wave of attacks from the BC Liberal government after the election. This is the first indication of it. Over the coming months and years, the economy will force the hand of business and their government. Campbell’s third term will look a lot more like his first. Once the 2010 Winter Olympics have come and gone, there will be a relentless attack on the living standards of the people of British Columbia.