Homebuilders bamboozled by Liberal Party

Friday, July 31st, 2009

Industry offered no breaks after surprise switch

Michael Smyth

After blindsiding B.C. with last week’s stunning HST consumer tax grab, Premier Gordon Campbell sat down with some business leaders to talk about the tax — which is more than he’s done for voters who believed the Liberals’ HST denials during the election.

I’m told the mood of the meeting was generally positive — understandable since big business will be the big winners with a 12-per-cent harmonized sales tax they can deduct as an expense, while consumers and many small businesses get slammed with $2 billion in unexpected new costs.

One business sector that will be brutalized by the HST is the home-building and renovation sector — which, like the B.C. restaurant industry, was double-crossed by the Libs. (Both were told directly in writing by the party that an HST wasn’t on.)

I obtained an e-mail sent out to Metro Vancouver homebuilders, describing the sit-down with Campbell and Finance Minister Colin Hansen.

“It was a love-in, as most industry sectors present were high-fiving each other and congratulating the provincial government,” said the dispatch from the Greater Vancouver Homebuilders Association.

The association, fearful the consumer price of new homes and renos will spike because of the tax, asked Campbell what kind of assistance the industry can expect. Will the government make the tax revenue-neutral for them?

“The premier offered a quick response: ‘There is no promise of neutrality.’ However, the premier said they would work with specific sectors to try to find ways to mitigate the HST’s more onerous effects. The premier said, ‘I get that there are problems. We need to identify them and do what we can to mitigate them.’

“The premier said he would like to look at other costs our industry faces and perhaps influence those impacts. The imposition of municipal development charges was one area he could examine.”

So Campbell is going to lean on cash-strapped muncipalities to give homebuilders a break now? And all while the homebuyers get hosed? Amazing.

This follows the government’s earlier backroom assurance to the restaurant industry that they’ll get a handout, too.

But for all you chumps coughing up the HST on everything from haircuts to funerals, don’t expect a bailout. Only the most powerful and well-connected interests will get a special deal.

I was fascinated, meanwhile, to read Hansen’s response to the homebuilders’ complaint that the HST will drive much of the home-renovation business to the underground black market, as consumers seek to avoid the HST.

“Hansen agreed this is a troublesome area that warrants close attention,” the e-mail reveals. Which is funny, because Hansen told me on CKNW radio this week that he didn’t think black-market renovations would be a big problem.

“It [the HST] actually reduces the propensity for black market,” Hansen told me.

One thing said in private. Another in public. Par for the course on this brazen broken-promise tax grab.

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