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A taxing issue

With the Winter Olympics being long over; the Canucks eliminated by Chicago in the second round of the playoffs; Vancouver’s bar, restaurant, and shopping centre TV screens now set to the FIFA World Cup in the noisy land of vuvuzelas; and the world’s attention focused on the G20 in Toronto; what’s happening in la la land these days that doesn’t involve a run-on sentence?

Well, we lawyers are all billing our proverbial brains out in advance of the harmonized sales tax that comes into effect here July 1. Currently, the province charges the seven-per-cent provincial sales tax on legal bills in addition to the five-per-cent federal levy. We’re the only province in Canada that does so. Nobody likes it because it’s unfair to fixed- and low-income earners who might need legal services but are strapped for cash and can’t run it through a business as an expense. Many lawyers hate it because the accountants and consultants who do the work we’d normally do don’t have to charge it.

As of the date of writing this, there are no regulations. Go figure. But everyone knows that if you don’t bill all the time that accrued before July 1, it’’ll be an accounting nightmare for everyone on July 2.

Adding the PST to legal bills was something the NDP brought into law in the early 1990s. With the HST debate raging here, does anyone in their right mind think the NDP would ever abolish it if they came to power? Not on your life.

Frankly, I don’’t have a big problem with the HST. I think from a public policy perspective, it’s a good move. One of the funny things about taxes is that the people who complain the most are often the same ones who demand first-rate medical care, no waiting lists to see doctors, 24-hour MRI turnaround times, well-paid nurses and teachers, more legal aid, small classrooms, no school closures, paved highways, more homes for the homeless, and cheaper wine prices.

I hate to break it to them, but taxes are the price we pay for civilization, something people in California, which can’t raise taxes constitutionally, are discovering amid that state’s crumbling infrastructure, collapsing public school system, public-sector layoffs, and regular fiscal crises. Were I Arnold Schwarzenegger, I might threaten to terminate all of the state’s school teachers, public servants, prison guards, and police officers just scare to willies out of the middle and upper middle class so they realize how important all of those employees really are. Maybe a few people down there might actually see that raising taxes to pay for public services is better than no teachers or police.

My barber, who’s Greek, tells me hardly anyone pays income tax in Greece, but everyone in the public sector there retires at 53 on the public nickel, something that’s infuriated the Germans who had to bail them out.

Look at Greece today. Look at other countries with loose tax regimes like Spain and Italy. Watch the Euro go south!

So taxes are like your prostate exam or colonoscopy you’re dreading: an awful experience but one that will save your life if you do it in time.

Anyway, I’m getting ahead of myself. Most tax lawyers and economists I’ve heard on the radio say the HST will be good for British Columbia. First of all, you get rid of an entire provincial government department charged with collecting a tax and you pass that expense onto the federal government. Good riddance.

Second, it’s good for business. Business will get input tax credits they didn’’t get under the PST regime and won’t have to deal with the Byzantine rules that applied previously.

Third, accountants and consultants will now have to charge the tax we lawyers have had to charge for almost 20 years, thus levelling the playing field.

Fourth, how does a province like B.C. compete with Ontario if it is adopting the HST? Their businesses will have a competitive edge we would lose if we didn’t come on board as well.

Fifth, under the PST, why is it that goods are taxed but not services? Isn’’t that unfair — even, dare I say, discriminatory — to the people who sell TVs, cars, and barbecues instead of haircuts and hamburgers?

Sixth, it’s hard to turn down a few billion dollars from the federal government to make the transition.

And lastly, the government isn’t touching my income, just my spending. So I can control my spending if I want.

Anyway, I say people should quit whining about the HST. It’s a done deal.

If you think your realtors, your funeral home directors, and your barbers will benefit disproportionately by charging the HST to their customers and thereby getting a larger input tax credit back, then strike a better deal with them. There’’s bound to be barbers, realtors, and funeral home directors who will pass the benefit onto consumers. It’s called competition. If you’re paying PST on the televisions, cars, and barbecues you bought before July 1 anyway, why not on your haircuts and hamburgers?

Besides, maybe the HST will help sustain our schools and hospitals and prevent us from turning into California or Greece.

I can’t talk about the HST without mentioning Bill Vander Zalm. Many of you will be too young to remember one of B.C.’s more flamboyant disgraced former premiers. Vander Zalm was forced to resign in 1990 under a dark cloud involving the sale of his theme park, ironically named Fantasy Gardens.

But Vander Zalm doesn’t like clouds, particularly dark ones. His entire political career was spent glowing in the blinding lights of TV cameras, so we used to think there was chlorophyll in his veins as well as blood. It seems he needs to bask in those bright TV lights again. Despite analysis from most of the economists, tax lawyers, and other experts who say the HST will be good for business, the Zalm has been spearheading a grassroots campaign that seems to have obtained 500,000 signatures on petitions throughout the province against the HST.

Vander Zalm is trying to recall elected B.C. Liberals or, if that fails, ensure they’re defeated in the next provincial election. He’s a populist type, even though he increased taxes when he was premier and never reduced or eliminated the PST when he had the chance.

Still, this is B.C., where logic is a four-letter word. He’s our very own Sarah Palin “Tea Party” politician. With Vander Zalm ensconced in the HST debate, we are indeed in la la land these days, and no one seems to be listening to the economists, tax lawyers, and other experts who see the benefits of HST. As oil continues to gush in the Gulf of Mexico and I search for metaphors involving Vander Zalm and the HST, I can only think of three words: ”Drill baby drill.”

Vancouver franchise lawyer Tony Wilson has written for various legal and news publications. He is associate counsel at Boughton Law Corp. His e-mail is

  • could I forward your article to the Nanaimo Daily

    Doug Johnston
    enjoyed your article .......................would love to forward this article to the Nanaimo Daily I have your permission?