I do not know if Mr. Vander Zalm is feeble minded or so focused on beating and/or beating up on the BC Liberals that he does not care what the consequences for the province and citizens of BC are. But at this point in time arguing the question of whether Vander Zalm is a lackwit or a scoundrel is as trivial and wasteful as arguing 2 months or closer to 18 months to discontinue the HST and bring back the PST + GST tax systems.

The referendum on the HST is June 24, 2011. This means that should British Columbians vote to repeal the HST the province will not receive the final $475 million payment for becoming a HST province that is due from the federal government on July 1, 2011.

Now, to Mr. Vander Zalm the loss of $475 million of revenue may be inconsequential or nothing for the taxpayers of BC to be concerned about. However I consider this first consequence of repealing the HST and the cuts that will have to be made to health care and education to offset this loss a significant and major consequence.

The next consequence, should Mr. Vander Zalm actually prove to have a magic wand that would enable the federal and provincial governments to end the single tax HST and bring back the dual taxes of the PST + GST in one or two months time, is the loss of the $300 million extra dollars the HST would put in provincial coffers this year and the addition of the $50 million cost of collecting and administering the PST (a cost that under the HST is currently borne by the federal government).

Meaning an additional $350 million will have to be cut out of health care and education. Or the entire $825 (475 + 350) million could be offset by closing down the provincial court and prison systems.

Now, Mr. Vander Zalm may not consider a loss of revenue that would require shutting down the provincial court and jail system to offset to be a significant enough consequence to be concerned about in repealing the HST – personally I do.

In all honesty (I know, a novel concept in a political fight) I do not expect the $350 million per year loss of revenue + increased cost to have an effect before next year’s (2012 – 2013) budget. The need to replace the single HST form with two new (old) GST and PST forms, to procure and distribute the forms to all businesses in the province and to hire the staff to collect and administer the PST (remember the federal government is responsible for collecting the HST and remitting to BC their portion) plus the need of businesses to reprogram their cash registers/computers, to change accounting systems back to two separate taxes, to get the new forms….. There was good reason that the HST took all those months to implement.

Whether Mr. Vander Zalm is simply clueless, hasn’t bothered to give this matter any thought or would rather befuddle and distract the voters by arguing 2 versus 18 months to get rid of the HST and reinstate the PST + GST rather than face the multi-billion dollar effect repealing the HST will have on BC is a matter the reader will have to judge for themselves.

Although BC, should the result of the referendum be a HST repeal, will not receive the final payment of $475 million and thus not be liable for repayment of that amount BC will be liable for repaying the $1.1 Billion already received (and spent) for becoming a HST province.

Despite Mr. Vander Zalm’s airy dismissal of this debt the fact is that these funds were paid to BC as part of the HST agreement and that in reneging on the HST agreement the federal government is due repayment in full. Forget claims of ‘negotiation’.

The federal government is not about to set an unwelcome precedent for provinces taking their (the feds) money and reneging on agreements. The federal government will want repayment in full and since they can get their money back by simply reducing federal transfer payments to BC by $1.1 Billion Mr. Vander Zalm’s spurious claims of ‘negotiating’ or not having to repay the full $1.1 Billion are just so much Politician’s BS. The Province of BC will have to cut the $1.1 Billion out of budget spending because the feds will get their money back and there is nothing the province can do to prevent that.

Repealing the HST will impose a major financial indirect cost on the province of BC in the form of an increase in borrowing costs. Potentially a rather significant cost given the budget deficits BC is running and the increasing debt levels of the province of BC.

Repeal of the HST is a taxpayers revolt, a rollback of the tax increase effected by the switch to the HST and the fact that the provincial portion of the HST applies to more items than under the PST.

How are those who lend to the province repaid? Out of tax revenues.

BC is running large billion dollar deficits and taxpayers are refusing even a modest $300 million dollar tax rise to pay for provincial spending. Indeed, at the same time taxpayers are refusing to pay this modest tax increase they are demanding more healthcare and education spending.

Factor in the budget and financial chaos and damage the immediate loss of $475 million, the $300 million yearly reduction of revenue, the $50 million dollar cost of administering the PST and the $1.1 Billion dollar repayment to the federal government……and from the view of those with funds to loan, loaning BC money involves increased risk.

The perception of increased risk means an increased cost of borrowing. That the HST referendum is being held will increase BC’s cost of borrowing. Should the HST be repealed, a further premium will be added to the cost for BC to borrow.

Part of that premium will result from the perception that the BC government can no longer be counted on keep their agreements. And what that perception will cost businesses in BC, the government of BC and ultimately the taxpayers of BC only time will tell.

As I said, whether Bill Vander Zalm is a lackwit or a scoundrel is a rather trivial consideration at this moment, considering the devastation Vandr Zalm will have inflicted on the government and citizens of BC should he succeed in repealing the HST – once the consequences of repealing the HST come home to roost.

While there may be an element of truth to accusations that Premier-designate Christy Clark and Finance Minister Colin Hansen are fear-mongering (fear-mongering being a favourite tool of politicians) I have no doubt that Clark and Hansen are themselves (as is any British Columbian who understands the consequences of a HST repeal) afraid of the consequences of an HST repeal. Especially as they are the people who will be faced with dealing with the financial mess a repeal will bring about.

One final comment on this matter – Mr. Vander Zalm’s partners in crime. It does not matter whether the NDP’s support of repealing the HST signifies an abysmal lack of any comprehension of financial realities or a desperation to win the next election at any cost, no matter how devastating to the province and taxpayers. Either possibility disqualifies the NDP (without major changes in candidates and leadership) from being entrusted with