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Most people trust small businesses for HST information

According to a recent Angus Reid poll, 63 per cent of people believe small business is the most credible source for HST information, according to the Canadian Federation of Independent Business.

As British Columbians prepare to vote in the HST referendum, who do they trust for information?

According to a recent Angus Reid poll, 63 per cent of people believe small business is the most credible source.

That's far above Premier Christy Clark (40 per cent), Finance Minister Kevin Falcon (33 per cent), NDP leader Adrian Dix (35 per cent), unions (28 per cent) and the media (37 per cent), according to the poll.

Small business owners have credibility because they consistently demonstrate concern for their customers and communities. Many business owners who stood to benefit from paying lower taxes still opposed it because they were worried about their customers.

As a group, small business didn't ask for the HST and didn't jump to defend it when it was announced. At the initial proposed rate of 12 per cent (five per cent federal GST plus seven per cent PST), 45 per cent of small businesses supported the HST.

Support jumped to 83 per cent following the two-stage, two-percentage point cut to the provincial rate (for a total HST of 10 per cent) recently announced by Falcon.

So why does small business now want to stick with the HST? First, the two point cut to the HST makes it a definite win for businesses and their customers. With the HST, overall sales taxes would be 10 per cent by 2014.

If we go back to the PST/GST, sales taxes will stay at 12 per cent — although taxes on items such as restaurant meals and haircuts that were previously exempt from PST, and now subject to HST, would presumably go back to being lower.

Second, for many businesses, the HST is good for the bottom line, leaving more money available to buy equipment, increase wages and lower prices.

Finally, the HST saves businesses the migraine that results from complying with two sets of tax rules.

There are a few other consequences of rejecting the HST for voters to think about, such as having to repay $1.6 billion in transition money to the federal government and spending $30 million a year to restore the infrastructure to collect PST.

B.C.'s investment climate would also take a hit if we flip-flop on the HST, making HST provinces such as Ontario look relatively attractive for business investment.

The HST decision is important tax policy for B.C. and deserves careful consideration.

Most British Columbians believe small businesses will give them the straight goods and the majority of small businesses will be voting to keep the HST. Which, confusingly, is a 'no' vote on the ballot — so read the question carefully before you mark it.

Laura Jones is the senior vice-president research, economics  and western Canada with the Canadian Federation of Independent Business.


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