It looks like B.C.’s business community is about to declare a war of sorts against the NDP government over its expansion of the provincial sales tax, and history suggests this kind of thing does not end well for a New Democrat adand history suggests this kind of thing does not end well for a New Democrat administration.
There have been two previous occasions where the business community has united behind a common front against an NDP government for going a little too far for its liking, and in each instance, the NDP lost the next election.
It happened in the 1970s, when the Dave Barrett-led NDP government brought in a blizzard of groundbreaking legislation (much of it remains on the books to this day) and a host of tax increases that infuriated the business community.
Barrett unwisely called an early election in 1975 and paid the price dearly in the voting booth. The Social Credit Party reunited the center-right free enterprise coalition – backed into doing so by that same business community – and regained power and held it for almost 16 years.
In the late 1990s, the first “B.C. Business Summit” was formed. In 1999, it brought together broad elements of the business community – everything from forestry to mining to small businesses – for a multi-day convention at the original Vancouver Convention Centre.
Worried about an alarming rise in business bankruptcies, a steep rise in government spending, high levels of taxation and a host of other concerns, the Summit prepared a strategy to help oust the NDP from power.
(As a personal aside, I covered that “summit” and my favourite moment came when the legendary business tycoon Jimmy Pattison walked into the convention hall and strode across the room, in front of a hushed crowd, and walked over to me with his arms folded and said: “Well, Keith, what do you think?”)
Of course, the NDP was demolished in an election less than two years later, although it can be argued that other issues – such as the fast ferry fiasco – played as big a role as the business community’s clash with the government.
Are we about to see history repeat itself?
Last week saw a somewhat extraordinary gathering of about 20 business leaders representing key pillars of the economy as they called on the government to scrap the expansion of the PST to a wide range of professional services.
Those services include accounting, engineering, geoscience, security, architectural and commercial real estate.
Slapping the seven per cent tax in these areas, they argued, will increase the cost of housing, major industrial projects and even the hiring of security guards by small businesses to help protect them from vandalism and shoplifting.
When added to the PST expansion to things like land phone lines and cable TV – two things consumed at disproportionately higher levels by seniors on fixed incomes – it is becoming clearer the NDP government did not put this budget through any kind of a political lens.
For example, the NDP government has said that major mining projects are now a major cornerstone of our economy and will play a significant role in reshaping it. Why, then, make a mining project more expensive?
Why force an array of small businesses – again, back to those security-conscious stores – to make costly accounting and administrative changes to cover the PST now part of their operations?
Those are the kinds of questions no doubt being prepared by this emerging coalition of business sectors – mining, forestry, real estate, small business, etc. – that will try to force Finance Minister Brenda Bailey to change course when it comes to the expansion of the PST.
If this becomes a prolonged showdown, however, the David Eby-led government better not hope history repeats itself come the next provincial election.
Keith Baldrey is Global TV’s legislature bureau chief.
Keith.Baldrey@globalnews.ca
