08/25/2011 07:50 EDT | Updated 10/25/2011 05:12 EDT

B.C. HST Vote A Political Opportunity For Christy Clark

BC Liberals

VICTORIA - No matter which way British Columbians vote in the harmonized sales tax referendum, Premier Christy Clark has a monumental political sales job ahead of her, say political experts.

The results for the historic mail-in referendum that decides the future of the combined 12-per-cent federal and provincial sales tax are due Friday morning.

Elections BC, the independent agency monitoring the mail-in vote, said about 1.6 million British Columbians — or about 52 per cent of registered voters — voted in the referendum.

The controversial HST has already cost former Liberal premier Gordon Campbell his job, but pundits say Clark, who was elected Liberal leader last February, needs to turn the HST vote into a political opportunity whatever the vote result.

Clark's Liberals campaigned to retain the HST, which was introduced in July 2009 and became law in July 2010. She admitted this week her government has a detailed plan to get rid of the tax if that's what British Columbians vote to do.

Clark, who has scheduled a news conference following release of the referendum results, said little about her so-called Plan B other than it involves rolling up her sleeves and working hard.

"I can see in the backrooms people cranking out scenarios," said Prof. Michael Prince, a University of Victoria social policy expert.

"In either direction, you can make a case that this provides an opportunity for Christy Clark."

Prince, who predicts a narrow victory for the No side to keep the HST, said either way the vote goes feeds into Clark's election readiness plans.

Clark has said she might call a provincial election before the set May 2013 date, and the HST vote could provide her with the right timing.

If British Columbians vote to keep the tax, Clark could say, "'Thank you for that folks, now here's a more positive, fulsome agenda I'd like to campaign on,'" said Prince.

"If it goes down to defeat, I could see a scenario, possibly, where an election would be called on — I'd hate to say it — a tax policy."

Prince said the possible dumping of the HST gives the Liberals a chance to revisit the former provincial sales tax and the entire tax system.

"This is an opportunity to talk about the future direction of the budget and the fiscal planning of the province," he said. "She could say this is where (the Adrian Dix-led New Democrats) want to take you and where the Christy Clark Liberals want to take you."

The Liberals, who promise to drop the HST to 10 per cent from 12 per cent by 2014, say repealing the tax puts a $3 billion hole in the B.C. budget, which includes repaying the federal government $1.6 billion it received to introduce the HST.

Government estimates released last May indicate the government's budget deficit would increase to $2.5 billion in 2011-2012 from the projected deficit of $925 million.

The deficit includes repaying Ottawa $1.6 billion and $42 million in debt interest costs.

Financial statistics released by the govenrment last month show the province accumulated $4.2 billion in HST revenues.

The government has said keeping the tax is crucial to the province's economic future, spurring investment and creating jobs.

The New Democrats say the HST shifts $2 billion from business to consumers.

The public furor over the government's introduction of the HST in July 2009 catapulted former B.C. premier Bill Vander Zalm back onto the political stage as the leader of an anti-HST organization.

Vander Zalm's Fight-HST campaign mobilized a massive grassroots campaign last year that resulted in more than 500,000 people signing a petition to repeal the HST.

The petition results activated B.C.'s direct democracy laws that permit referendums and recalls of politicians.

B.C. business leader Phil Hockstein said Vander Zalm's campaign originally outflanked the business lobby with inflammatory anti-HST rhetoric.

"In the first round, the Zalmoids were fighting and we were unarmed," said Hochstein, who represents independent contractors in B.C.'s construction industry. "We just didn't do anything."

But in the month's leading up to Friday's vote results, Hochstein said business leaders did a better job informing British Columbians about the benefits of the HST.

Smart Tax Alliance spokesman Peter Leitch said those advocating for the HST were able to swing many votes in the past few months, but it still may not be enough.

"Certainly we turned the polls around from people being opposed at nearly 80 per cent to now we're pretty close to 50-50," he said.

But Leitch said the government or the business community may not have enough support to recover from the Liberal government's poor introduction of the tax in July 2009.

"You are better off making sure on tax policy that the public's consulted in advance," he said. "It's maybe a lesson learned that it was brought in poorly."

Dirk Meissner, The Canadian Press