The Harmonized Sales Tax catalyzed one of the most interesting political and policy debates in British Columbia's history. While more will be written on the HST over time, the post-HST analysis has not provided a thorough discussion of the referendum process and outcome.
In the Winter/Spring 2013 issue of Inroads, John Richards raised the question of the merits of direct democracy in making tax policy--a bad idea in his view. On the opposite side, Richards's colleague at Simon Fraser University, Doug McArthur, writing in Policy Options (November 2011), made a case for the referendum process: voters understood the HST well enough and the government "debacle" in introducing the HST justified the HST referendum and outcome. In McArthur's view, this was an effective example of direct democracy.
As I see it, neither of them has it quite right. Both gloss over important process and outcome considerations that shine more light on a crucial question: Can there be sufficient "informed consent" among voters in questions of major tax policy reform to justify a limited use of direct democracy?
The debate around the HST has been framed in terms of dichotomies: Is direct democracy good or bad for tax policies?
Should we have a value-added tax or not? Did the Campbell government deceive British Columbians before and after the 2009 election? To my mind, all of these dichotomies miss important questions of policy process and outcome.
For full disclosure, I worked for the provincial government until 2007, leaving as former Premier Campbell's deputy chief of staff. I returned in October 2010, when I was tasked by the government with running what became the HST Information Office. The office had the uniquely challenging mandate of ensuring that the HST referendum went forward in a credible manner, while also ensuring that the government's case for the HST was understood and potential changes to the initial HST were brought forward in a more publicly engaged (and acceptable) manner.
In my current role as vice-president of policy and communications at the B.C. Business Council, I will be undertaking a more comprehensive review of the HST experience, with a focus on ensuring that future provincial leaders, whether in government or in business, learn from the HST experience. However, I write here as an individual involved in the HST referendum process.
To begin, there is no question in my mind that opponents of the HST made legitimate use of the provincial...