While the B.C. Liberals have tried to frame the drive to sales tax harmonization as a one-way street, there is one instance of a Canadian province heading down that particular road, then reversing direction.
It happened at the outset of the national shift to value-added taxation, of which the federal goods and services tax and its pending successor, the harmonized sales tax, are both examples.
Just weeks after the GST took effect nationally on Jan. 1, 1991, the then Saskatchewan government of premier Grant Devine announced it would harmonize the province's seven-per-cent sales tax with the seven-per-cent federal levy.
The changeover began April 1 of that year with the province moving to the same base as the goods portion of the federal tax. The phase-in was scheduled to be completed on Jan. 1, 1992, with harmonization of the provincial and federal tax bases on services as well.
Unfortunately for Devine and his fellow Conservatives, he had to face the voters that year, having run out of the full five years of his mandate, and the anti-harmonization backlash helped cost him the election.
On sweeping to power on Oct. 21, 1991, the New Democratic Party under new premier Roy Romanow lost little time consigning the harmonization to the ash heap of provincial history, along with Devine and his Conservatives.
A postelection session of the legislature, convened in early December, repealed the harmonized tax and restored the previous provincial levy, retroactive to the day after the election.
NDP finance minister Ed Tchorzewski estimated the savings to provincial taxpayers from repeal at $72 million for the remainder of the budget year and $140 million over a full year.
Relief for Saskatchewan taxpayers was short-lived, however. The following spring Tchorzewski launched a better than $200-million tax grab of his own, boosting income, tobacco and fuel taxes and -- irony of ironies-- boosting the restored provincial sales tax by a full point to eight per cent.
Though the increases exceeded the savings from the repeal of harmonization, the New Democrats were able to justify the two-step by pointing to considerable evidence of fiscal mismanagement by the driven-from-office Conservatives.
The Saskatchewan experience also marked the end of any moves to harmonization throughout Western Canada. Alberta won't entertain a provincial sales tax of any kind. Manitoba rejected harmonization in the current round. And the idea was a complete nonstarter in B.C. until the sudden reversal by the B.C. Liberals following the last provincial election.
As evidence that the B.C. Liberals' change of direction could itself be reversed, the anti-HST campaign has lately invoked the Saskatchewan experience. "The HST is not a done deal until the people decide it is," declared campaign leader Bill Vander Zalm on the weekend. "Saskatchewan proved that and we will too."
But there are some obstacles in the way to a straightforward repeat of the Saskatchewan scenario, the most obvious being the still distant date of the next provincial election -- May 2013.
The current leader in the opinion polls, B.C. NDP leader Carole James, has warned against assuming that her party, should it win, would immediately tear up the current five-year federal-provincial operating agreement on the HST.
The reason for her hesitation was readily apparent from some recent comments in the legislature by the party's finance critic, Bruce Ralston.
"If B.C. were to give notice to leave prior to the conclusion of the five years, as I understand, reading the agreement, the B.C. government would have to pay back the $1.6-billion transitional assistance payment.
There's also a following provision that if B.C. didn't pay that amount, that could be offset against other federal-provincial transfers between the province and the government of Canada."
The other reason for doubting the NDP would get rid of the tax in 2013 would be the sheer passage of time.
One thing to scrap a new tax after a few months. Quite another to undo a tax regime after it has been in place a couple of years, as Canadians discovered when the federal Liberals took power in late 1993 and betrayed their promise to get rid of the GST.
Seeking to suffocate the infant tax in its crib here in B.C., the anti-HST campaigners are concentrating their energies on pressuring the Liberals to save themselves by reversing themselves straightaway.
The federal enabling legislation for the HST is called "the Provincial Choice Tax Framework Act" for a reason. If a province wants out -- and is willing to pay back the transition funding and cover Ottawa's administrative costs -- then the federal government will presumably let it out.
But the B.C. Liberals show zero signs of readying that particular escape hatch. They are betting on outlasting the anti-HST campaign, believing the longer the tax is in place, the less likely it will cost them their hold on power. The months ahead will determine whether they've guessed right.
