Packed into the pamphlet was also a 3-page spread covering reasons to support the HST citing academic, economic and comparative research for why British Columbia should adopt the tax. According to the information provided, in locations where HST has been implemented, wages increase, employment opportunities increase and prices of goods decrease. Residents were also told that prices on “every day items” would not be effected (i.e. groceries, children’s clothing and books).

BC Finance Minister Kevin Falcon reported early this week that the pamphlets were designed and set to be released at the same time as an anti-HST petition was being processed in court which led to the disposal of the pamphlets before their scheduled distribution to the public.

Falcon believed that the provincial government at the time wanted to capitalize on the positive momentum springing from the Olympics to use as a platform for communicating the merits of the HST to BC residents. Unfortunately, given the negative public perception of the tax and the petition being held in court, the Premier’s office decided to cancel the campaign believing the public would have a bad reaction.

Detailed information regarding the pamphlets was obtained by the Vancouver Sun after a drawn-out battle with the provincial government over the Freedom of Information Act. The detailed 10-page pamphlet was scheduled to be mailed to every BC household and cost taxpayers $780,000 dollars to design and print. It was also recently revealed that the BC government spent additional monies to design and print different versions of HST pamphlets for distribution. For various reasons, including a rejection from Elections BC, all the pamphlets were shredded.

Residents of provinces that have adopted the HST have most likely experienced an automatic harmonized sales tax applied to products that are ordered or shipped to their residences. What is not as readily experienced or known is that residences of provinces that have not adopted the HST will have to pay the additional tax when shipping domestic goods to any of the participating provinces. For example, if an Alberta resident ships a package to a resident in Ontario, they will be charged HST.

This tax regulation has residents of non-HST adopting provinces frustrated-with reason. While provinces may not have adopted the tax, residents are still paying for the decision that other provinces made. According to the federal Excise Tax Act if the province of destination applies HST, the goods shipped will be taxed accordingly. Similarly, if the goods are shipped to a province where only GST applies, only GST will be charged. The Act also applies to brokering services. If the goods come through a province where HST is applied, HST must be paid and is added to the cost of the goods.

While lawmakers see logic in the way taxes are charged, the Act still leaves most consumers scratching their heads as to the rhyme or reason behind when the dreaded tax is applied and where. And although the controversial tax was outlawed in British Columbia, residents across the country will continue to pay as long as shipments are made to Ontario and Atlantic provinces.

Premier Christy Clark and Falcon have been in negotiations with the federal government to try to reduce the total repayment amount to Ottawa or eliminate the debt altogether. According to an official statement made by Falcon this week, the province will still have to pay back the full amount less interest he said would total close to $118 million.

And while Falcon assessed the deal to be fair for both the federal government and for BC, the anti-HST leader Bill Vander Zalm thought the deal was anything but fair.

Vander Zalm said he expected more from provincial negotiators assessing that the time that BC will have had the HST in place should have been taken into consideration given that the federal government will have collected an estimated $1 billion in extra tax dollars. Vander Zalm is unhappy with the outcome of the negotiation calling it a “disaster”.

Some financial analysts were also perplexed as to why the federal government failed to credit BC with the three-year HST term believing that the waiving of interest payments may be in lieu of credit.

Regardless of this new development in the ongoing saga surrounding the HST in BC, the timeline for switching back to the PST/GST system remains unchanged–still sitting at 2013. The provincial budget will suffer a hit for the 2013-2014 budget while the deal will push this year’s deficit to more than $3 billion.

Although nothing was said regarding any tax increases or program cuts, with a deficit of more than $3 billion and $1.6 billion in debt to pay off to the federal government, British Columbian taxpayers are sure to feel a negative impact as a result of the continuing HST controversy.

According to recent reports, retailers saw a surge of sales on Boxing Day by BC residents. It was anticipated that because of an overall low-consumer confidence that sales would decrease but as Wynne Powell, CEO of London Drugs Richmond stores assessed, the economy as a whole continues to gain strength “[...] but people have been lacking confidence to spend money.”

Big chain stores such as Best Buy also saw increases on Boxing Day and saw strong sales throughout the month of December leading up to Boxing Day week.

And while store owners were enjoying an influx in sales, mobile traffic for online retailers saw more than a 100 per cent increase over last year. With the surge in purchasing iPads in 2011, online shopping increased generating 7 per cent of online sales just on iPads. Other mobile traffic was up by 18 per cent overall. Moneris reports transactions were up 6 per cent from last year encompassing debit and credit transactions.

Restaurants also served more guests than last year over the holiday season despite the HST controversy applied to bills. The combination of large Christmas parties and out of town visitors to restaurants especially in larger centers was felt especially in the urban areas.

Although sales were strong in BC over the holidays as consumers continued to enjoy sales even after Boxing week, retailers are expecting the normal two-month slump in consumer spending in 2012. As a means of combating the usual January to February slump many restaurants are instituting meal deals while retailers are bringing in promotions and new merchandise to entice consumers. Most store owners anticipate that sales will be down until Valentine’s Day and have planned accordingly.

Despite the HST in British Columbia, residents made up 28 per cent of Boxing Day sales across the country.

According to the Stop Smart Meters group based in Nanaimo, the new smart meters have been reported to have adverse health effects due to exposure to the electromagnetic radiation emitted by the devices. This is cause for concern for BC residents as BC Hydro is moving forward with the initiative without any consent from the people.

For some, the move is too close to the way the HST was handled by the provincial government-with no democratic steps taken. Watching Ontario residents fight the smart meter battle with the HST tacked onto energy costs has Nanaimo residents riled up to fight a similar fight. The group is also taking further steps by making an official petition to the government under the BC Recall and Initiative Act in order to reverse the decision of BC Hydro to install smart meters. Starting with more than 15, 000 signatures, Citizens for Safe Technology has also joined the fight and is looking to collect more than 100,000 signatures by February 2012. They have already approached Energy Minister Rich Coleman to stop the smart meter program until such time as the BC Utilities Commission can make an official review of the program.

At the other end of the country, year-end reports from Ontario have confirmed that residents are paying more for their electricity than before the installation of the meters and with the addition of the HST, residents are struggling to keep up with bills. Furthermore, both Ontario and BC residents are leery of the implications that an invasion of privacy will take place due to the data that the wireless meters collects. The data collected includes the amount of power used, a breakdown of when residents are at home, and other personal data of hydro usage which potentially could be leaked to parties with malicious intent.

In order for the smart meters to be outlawed, signatures from more than 10 per cent of registered voters must be collected before forming an official question to the government. At that time, a referendum vote just like the HST can be held but not until 2013 according to laws in BC. Signatures are being collected online for the petition at the main Stop Smart Meters website.

After a recent deficit projection was made by the provincial government reporting BC’s deficit to rise to a whopping $3.1 billion for 2011-2012, Premier Christy Clark put in a formal request to the federal government for a reduction of the amount owed. Premier Clark is hoping that the government will take the province’s “tight fiscal circumstances” into consideration and ascertain the necessity of balancing the books before making any formal decisions in the matter. According to federal sources however, the Stephen Harper government is not looking to reduce the amount owed by the province of BC.

Premier Clark is seeking credit for the time that the HST was in place (nearly 2 1/2 years once the HST is abolished in 2013) as well as an extended repayment period in order to pay back the remaining balance.

Put in effect on July 1, 2010, the HST, a combination of the provincial sales tax (PST) and government sales tax (GST) was to remain in effect for five years following the receipt of the $1.6 billion given as transitional aid to the province to assist with the changeover.

Federal sources have yet to comment on the extension of the repayment period.

According to recent reports, construction companies are resorting to making deals with potential buyers, offering to pay a portion of the HST that is being added to properties costing more than $525,000. While this is helping to persuade new home buyers, the builders and developers are ultimately losing money.

Construction companies are frustrated that the BC government is taking its time to reinstate the PST/GST system and are leery of the new PST rules that will come into effect in 2013 with the exit of the HST system. Currently the 12 per cent HST is applied to new homes that cost more than $525,000 whereas prior to the HST, new home purchases were only subject to the 5 per cent GST. And with no transition rules being presented by the provincial government on reinstating the PST, it has industry reps concerned.  Home renovations have also seen a decline since the implementation of the HST, as consumers continue to hold back on major purchases until the PST is reinstated.

In addition to the stalls in building projects, the industry is anticipating that more than 8,000 potential construction jobs will be put in jeopardy along with roughly 250,000 related jobs annually–for which the industry is seeking compensation from the government.

In response to the stall surrounding the PST the Urban Development Institute is proposing to the provincial government that there be transition rules created to address the move from the HST back to the PST/GST system. The UDI is also suggesting that rebate cheques be offered to consumers who purchase homes above the $525,000 mark and that the threshold be raised to encourage more new home purchases up until the HST is removed.

UDI’s president Don Forsgren is hoping that by looking into transition strategies and minimizing the continued negative effects of the HST on the housing industry that consumers will continue to purchase new homes in the interim rather than holding off until 2013. Representing more than 550 BC developers, the UDI will continue to lobby the government for assistance in this tumultuous season.

It is important to note that although the August referendum in BC voted the HST out, the system will remain in effect for approximately two more years as the provincial government makes plans to reintroduce the PST/GST system.

The BC HST rate is applied to most goods and services including new homes, property, haircuts, and entertainment purchases. Select automobiles, snack foods and restaurant meals, newspapers and magazines, moving services, air transport originating in BC and taxi services have the BC HST rate added to the cost.

With the HST being implemented however, there are exemptions. Some of these exemptions include: basic groceries, rent paid on residential units, prescription drugs, and select educational, health and dental services. Overall, the general rule of thumb to be applied is if the product or service does not have GST added to the cost, then, HST is not applied either. All of the BC HST Exemptions can be found here.

Rebates have also been implemented. Gasoline, feminine hygiene products, books, and most children’s items are subject to an ‘instant’ rebate at the point of sale or through an application process. When building a home, the provincial government also offers a rebate. Low-income residents of BC have also been receiving rebate cheques every quarter since the implementation of the HST to off-set any additional costs.

Even though the Referendum in BC has defeated the HST, it is important to refresh one’s knowledge of the items that may or may not be affected in the next few years as the PST gets re-implemented.

Premier Christy Clark announced last week that a job strategy was being created to further develop the natural gas industry. Clark is looking to expedite the process of exporting natural gas to Asia. Due to the recent drop in natural gas prices in North America, many corporations are looking to ship their product overseas to sell at a higher price. Clark has been deep in talks with Pat Bell, Minister of Jobs, Tourism and Innovation to establish ties with India, Korea, Japan and China in the industrial industry. Bell, who had success in creating a successful Asia Pacific market for the lumber industry is looking to do the same for the natural gas industry.

With markets expanding in the Pacific Rim countries, Bell is confident that BC will find success in overseas export markets especially due to the geographical location of the province in relation to the Asian countries.

Projects are underway to streamline the Liquefied Natural Gas (LNG) industry by establishing terminals to ship the product to Asia Pacific. Creating this new market is said to increase government royalties while creating jobs in the industry. Already, a potential export site has been proposed for Kitimat, BC. Though the projects are said to be lengthy, the province is responding by attempting to reduce the processing timeline in order to speed up the process, thereby stimulating the suffering economy and hopefully lessening the gap between lost revenues expected from the HST.

Encana Corp., EOG Resources Inc. and Apache Corp. are leading the way with an aggressive $4.5 billion LNG export terminal planned for the Kitamat region. The terminal is expected to create approximately 130 permanent jobs with 2500 jobs during construction and as a direct result of the project.  According to Clark northern BC residents will lead the way in the industry providing an example for the province and for the rest of Canada.

Other large corporations are working on their own terminals for export as well as a private partnership with a northern tribe of First Nations. The estimated completion date, assuming the province will push the dates as proposed, will be as early as 2015.

Though this comes two years after the HST is scheduled to be completely phased out, Clark is hopeful the plan will give an added surge to the economy that is long overdue. Competitive LNG markets in Australia and the USA threaten the success of the project which will force a quick process in BC in order to secure their spot in the global marketplace.

Although the actual process of scrapping the tax is scheduled to take a minimum of 18 months, Federal Finance Minister Jim Flaherty sees the defeat as an obstacle for the federal agenda of attempting to harmonize all provincial taxation systems. After B.C.’s response, however, it is clear that this will not be possible in the near future.

A strong believer in the effectiveness of harmonized taxation systems, Flaherty stated that “provincial sales tax harmonization is the single most important step provinces with retail sales taxes could take to improve the competitiveness of Canadian businesses.” Flaherty has continued to try to convince provinces to move forward with harmonized systems assuring them that the federal government will help support the tumultuous transition period that occurs.

Political analysts are finding fault with Flaherty’s frustration though, claiming that the federal government should be more actively involved in the communication and marketing process of the tax to the provinces-given that the rejection of the taxation has so negatively impacted the federal plan. Seeing as the federal government pushed to implement the tax in the first place, it is thought that the federal government should bear some responsibility for the tax failure.

Other analysts claim that the federal outcry is not sincere and it is merely the provincial economies and governments involved that will ultimately pay the price for a tax policy gone wrong.

Just this past week, B.C. Finance Minister Falcon announced one of the anticipated cuts that the province will need to make in order to absorb the repayment of $1.6 billion in HST transition funding to the federal coffers. Operational costs will be slashed and Falcon is working on an extremely tight fiscal budget as compensation. B.C. residents may also be facing tax increases in other areas that Falcon describes as being “a last resort.”  Other consequences on a provincial and federal level will include the decrease in international investment in B.C. and possibly across Canada-a by-product of a poor economic climate and the reversal of the HST. This will undoubtedly have a negative impact on the economy of the province and country as a whole in an already difficult time.

Regardless of the consequences both federally and provincially, the continued tension and emotion-filled debate surrounding the HST is just further proof that in order for the west to be won when it comes to HST, Flaherty will have an extremely difficult battle ahead, thus, derailing federal plans overall.