An NDP gov't might not spell a quick death for HST

British Columbians could be forgiven for thinking an NDP victory in the next provincial election would spell a quick death for the province's wildly unpopular harmonized sales tax.

The Opposition New Democrats have been unrelenting in their criticism of the Liberal government for its refusal to reverse course on the tax, and they've publicly supported a petition campaign that collected signatures from more than half a million voters opposed to the HST.

But the party also acknowledges even a change in government would do little to change the position the provinces is in: a five-year agreement with Ottawa that could come with stiff financial penalties if B.C. tries to walk away early.

While the New Democrats continue their calls for the Liberals to turn back the HST clock, the party is already lowering expectations for what an NDP government would be able to do should the party take power after next election, scheduled for 2013.

By then, B.C. will have received all of the $1.6 billion in so-called "transitional funding" from Ottawa tied to the deal, and trying to break the agreement in order to pull out before 2015 could prompt Ottawa to ask for that money back.

It wouldn't make much sense, says NDP finance critic Bruce Ralston, to shell out that much cash so close to the end of the agreement.

"It's infinitely more complex now that the tax is in place, which is why we fought it so hard before it came into effect," says Ralston.

"If we were elected in 2013, we would give notice under the agreement of our intention, at the expiry of the agreement, to get out of it, and that would begin a negotiation. I don't see spending $1.6 billion on behalf of the public to get out of it early, if it came to that."

The NDP has been criticizing Premier Gordon Campbell and his Liberals ever since they revealed their plans to adopt the HST in July 2009. The announcement came just two months after a provincial election in which the Liberals said they weren't contemplating a harmonized tax.

That sparked a provincewide petition campaign led by former premier Bill Vander Zalm, which collected enough signatures to force the issue back to the legislature. A committee will soon decide whether to hand the petition to the legislature for a vote, or hold a non-binding referendum next year.

The NDP is urging the government to send the issue to the legislature as soon as possible and hold a free vote in which members of the Liberal majority wouldn't be forced to vote with their party.

Ralston says New Democrats will vote for the petition -- and against the tax.

However, he isn't prepared to say whether it would be worth it for the province to abandon the tax early if it meant owing hundreds of millions of dollars back to Ottawa.

Ralston calls that type of question "hypothetical," and points out it's still unlikely enough Liberals will vote against their party.

In the event that happens, he suggests Prime Minister Stephen Harper might not even demand all that money back, fearing he, too, could be tarred by anti-HST resentment in B.C.

"The consequence of a vote would be that the federal government would have to decide whether they would would insist upon the strict letter of the agreement," he says.

"That would be for the provincial government to approach the federal government. Mr. Campbell has a very close relationship with Mr. Harper, and I'm sure that would be the subject of some negotiation."

If the HST is still in place by the next election, the party will face a challenge explaining to voters why an NDP government won't be able to repeal the tax immediately, says Doug McArthur, who teaches public policy at Simon Fraser University.

"I think the NDP is going to have to work hard to make sure that those challenges in dealing with this are going to have to be recognized; they're going to have to work hard to make sure people understand that," says McArthur, who was deputy minister to NDP premiers Mike Harcourt and Glen Clark in the 1990s.

"They run the danger to be subject to the similar kind of allegations (as the Liberals): that they said one thing and they're doing another."

McArthur says the NDP will eventually be forced to take a position on whether leaving early, as the anti-HST petition demands, will be worth the potential financial penalties.

And McArthur predicts the Liberals will opt for a legislature vote rather than a referendum, meaning the NDP will be faced with that issue sooner than later.

"They (the Liberals) will be demanding that the NDP be absolutely clear, and the Liberals will bring forward amendments to the legislation to try and force the NDP to be absolutely clear."