BC chases Ottawa for a deal on HST debt

Premier to plead poverty as she mulls repaying $1.6 billion.

Photo of Premier Christy Clark courtesy of Wikimedia Commons.

It's not clear what Premier Christy Clark is putting on the table as she tries to cut a deal with Ottawa over how B.C.'s $1.6-billion HST repayment will be made.

The federal and provincial governments have been talking quietly for months about return of the money that was to have come to BC under its agreement to convert to a harmonized sales tax -- money that now must be returned, given a vote against the tax by B.C. residents this summer.

Such talks generally proceed in private, and the promises are not all made public. What Clark may be agreeing to provide the prime minister -- a friendly bit of support for future federal initiatives, for example -- won't necessarily be clear once the official deal is struck.

Friendly provincial support might be appealing to Ottawa, though.

For now, all Clark is saying is that she'll bargain hard, partly by pointing out to the prime minister that B.C.'s cupboard is pretty much bare right now.

And all the opposition is saying is that it's not amused.

The Canadian Press has the story:

VICTORIA -- Premier Christy Clark says she's trying to work out a new deal with Ottawa to repay the $1.6 billion British Columbia got from the federal government to adopt the harmonized sales tax.

Clark said Wednesday she was in Ottawa this week discussing the issue with federal officials.

"We're talking to them about it,'' she said. "We want to see if we can get the best deal we can for British Columbia.

"Remember this, when British Columbia made the decision to go back to the provincial sales tax I think everybody who voted knew that would legally oblige us to pay back the $1.6 billion,'' said Clark. "That's our legal obligation.''

Ottawa and the B.C. government have been quietly negotiating the repayment issue since last August when British Columbians rejected the HST in a referendum.

Clark said she told Ottawa the province is struggling to balance its budget --projected to have a $3 billion deficit this year -- and is looking for any help it can get on repaying the money.

She did not directly say B.C. was looking to repay less money, but her officials suggested they would prefer new payment terms over an extended period of time.

The B.C. Liberals say it will take until March 2013 to return the province to the old provincial sales tax and GST system.

A federal finance spokesman said Ottawa still expects the $1.6 billion will be repaid.

"As we have said all along, provincial taxation is a provincial responsibility,'' said Chisholm Pothier. "We are working in a fully co-operative manner with the B.C. government to facilitate their recent decision to return to the PST as quickly and as efficiently as possible.

"The provincial government has also repeatedly acknowledged that the $1.6 billion given for the explicit purposes of transitional assistance will be recovered as per the agreement,'' he said in an email to The Canadian Press.

Opposition New Democrat house leader John Horgan said the Liberals knew last spring the HST was heading for defeat and it's absurd and embarrassing to have the premier going cap in hand to Ottawa now.

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