As thousands of British Columbians sign anti-HST petitions, major organizations who represent 30,000 businesses and employ one million people spoke out Monday in favour of the HST.
The groups who represent the forest, movie and petroleum industries, among others, said the HST will ultimately lead to higher wages and lower prices even though the restaurant, housing and tourism industries are attacking the tax, saying it will increase costs to their customers.
"We believe the HST will improve the underlying strength of the B.C. economy, improve productivity, and, most importantly, boost wages," said Retail Council of B.C. spokesman Max Logan.
The struggling forest industry is highly supportive of the HST, said John Allan, spokesman for the Council of Forest Industries, which represents to major forest companies in British Columbia.
COFI has been lobbying for harmonized taxes for years, he said.
It allows business to file for 12 per cent tax credits at year end as opposed to the current five-per-cent GST, Allan said.
"We will get an input tax credit for that portion of the HST that we currently pay in PST, and don't get any tax credit," said Allan, who estimates the industry will save about $135 million in taxes.
Public Policy Prof. Doug McArthur of Simon Fraser University said the uproar over the HST will calm over time as business interests lobby each other behind the scenes in an effort to from a united front of support for the tax, but in the short-term the government should brace for public furor and Opposition attacks.
"Really, to do something like this three months after the election is pretty dishonest," he said. "For that, they deserve to be hammered hard."
McArthur said the Liberals clearly underestimated the level of anger over the HST by small business and real estate interests who are upset about having to add hundreds and thousands of dollars of extra tax onto their goods.
The HST amounts to a $2 billion -- and counting -- tax break for B.C. business, he said.
But despite the political gold mine the HST presents to the Opposition, the New Democrats would be wise to focus most of their attention in the legislature on the budget and the state of the province's finances, said McArthur, a former deputy minister in the previous B.C. NDP governments of Mike Harcourt and Glen Clark and an elected New Democrat in Saskatchewan in the Allan Blakeney government.
Hansen said earlier he believed until June the government could meet its $495 million deficit target, but huge drops in personal and corporate tax revenues forced him to give up his original deficit forecast.
Last week, he said the government has lost another $2 billion in revenues since June, and that will increase the deficit.
Tax revenues continue to decline, projected energy revenues are dropping and costs to fight forest fires are rising, said Hansen.
