B.C.’s rejection of the harmonized sales tax (HST) will hurt a lot of local businesses and convince manufacturers to move to Ontario or another province that has the HST, according to Andrey Pavlov, an associate professor at Simon Fraser University’s Beedie School of Business.
“I just can’t see why any manufacturing business would choose to move here or remain here,” Pavlov said. “We don’t have very much manufacturing to begin with; we’re going to have even less now.”
According to Elections BC, 54.7% of voters cast “Yes” ballots to extinguish the HST.
On top of additional taxes many businesses will pay under the reversion to the old PST/GST regime, Pavlov emphasized the costs businesses will face to switch their accounting systems.
“It’s terrible because you pay the cost of switching twice. You go to HST, you figure it out, it’s finally running smoothly, and now you have to pay, again, the cost of going back.”
Pavlov said that while he’s very disappointed with the referendum result, he’s not surprised. “The government did a terrible job explaining why the change was needed. And then there were political forces in our province that seized that opportunity and went against something that is really good for our province – and they did it for political gain.”