The Precarious Politics of Shifting Direction: The Introduction of the HST in BC and Ontario
Keywords: politics and public policy reform, taxation, Liberal Party, harmonized sales tax (HST), Gordon Campbell and government
AbstractIn 2009 the governments of British Columbia and Ontario announced the harmonization of their provincial sales taxes with the federal Goods and Services Tax, an opportunity which had been persistently rejected for twenty years. Policy and political windows opened for harmonization as governments struggled with the budgetary consequences of a severe and growing recession. The Harmonized Sales Tax proved politically unpopular in both provinces, but outcomes varied dramatically. In Ontario, the HST remains intact; its survival reflected Premier Dalton McGuinty's new-found belief in the necessity of harmonization as well as his government's expansive measures to encourage public acceptance of it. In British Columbia, the HST was extinguished following a widespread populist rebellion that found expression through the province's Recall and Initiative Act. Ironically, the same objective that prompted the HST's adoption -- deficit containment -- also led to its demise.