TAX NEWS - June 2010

BC Tax: B.C. cabinet minister quits over sales tax

British Columbia's minister of energy has resigned from cabinet to protest the province's soon-to-be implemented harmonized sales tax.

Blair Lekstrom announced his resignation yesterday.

"Today, I submitted to the premier my formal resignation from the cabinet position of minister of energy, mines and petroleum resources and I informed him that I would no longer be able to serve as a member of the B.C. Liberal caucus," he said in a news release.

"I will continue my duties as MLA for Peace River South."

Lekstrom said that his first priority as an elected official is to the people of his constituency who elect him and then to the political party he represents.

"It is clear to me that the residents of Peace River South are opposed to the Harmonized Sales Tax (HST) and are unhappy with the way in which our government moved forward with this policy," he said.

The introduction of an HST in B.C. and Ontario has been controversial, but especially so on the West Coast.

Former B.C. premier Bill Vander Zalm has led a campaign against the merged tax, and organizers said last month they reached the threshold to force a referendum.

Organizers said 10 per cent of registered voters in all 85 provincial ridings have signed a petition to kill the proposed tax.

There has also been a proposal by anti-HST activists to recall politicians from the governing Liberal Party.

The province's 12-per-cent HST is set to come into effect on July 1, the same day the HST will be introduced in Ontario, where reaction has been muted.

Opposition to the B.C. tax, which combines the five per cent GST with the seven per cent PST, is fuelled by anger that the HST will be applied to everything the GST covered, including many items previously exempt from the provincial tax.

"I recognize and admit that I supported the HST when our government made the decision to move forward with it last summer," Lekstrom said in his release.

"I firmly believe that government is making a decision they believe will help the province, but as we

have been unable to bring the public along, I acknowledge there is a need to re-evaluate this decision. "

Lekstrom has been in government for nine years and in cabinet for the last two years.

His sudden departure triggered a minor cabinet shuffle.

Kootenay East representative Bill Bennett has been appointed the new energy minister in place of Lekstrom.

Westside-Kelowna representative Ben Stewart has been appointed minister of community and rural development in place of Bennett, and Vancouver-False Creek representative Mary McNeil becomes minister of citizen services.