Commercial Litigation and Dispute Resolution Blog

Proponents of the anti-Harmonized Sales Tax ("HST") petition (the "Petition") have described the exercise under the Recall and Initiative Act (the "RIA") as "grass roots democracy" in action.  By taking to the streets and shopping malls of the province, former premier Bill Vander Zalm and his team collected over 700,000 signatures in support of the Petition and on February 4, 2010, the Chief Electoral Officer for B.C. certified the Petition under the RIA.  As contemplated under the RIA, the Petition included a draft Bill purporting to extginguish the HST in B.C. 

The battle over the HST recently left the streets and entered the court room as a coalition of business interests sought judicial review of the decision of the Chief Electoral Officer to accept the Petiton.  The gist of the argument advanced in support of judical review was that the HST is really a federal tax and is therefore beyond the applicationof the RIA.  Put another way, it was argued that the Petition effectively seeks to repeal the federal legislation creating the HST, something clearly beyond provincial competence.

In a judgment dated August 20, 2010 in which he described the matter as one of intense public interest in the province, Chief Justice Bauman rejected that argument and dismissed the judical review application.  In his view, the Petition and draft Bill were concerned with B.C.'s participation in the federal-provincial agreement that provides for implementatin of the tax in B.C..  As that was a matter clearly within provincial jurisdiction, the RIA could apply.  The Chief Justice concluded his decision by requesting that the Chief Electoral Officer proceed with the process established under the RIA.

While Mr. Vander Zalm was successful in winning this initial "battle," the "war" is far from over.  The next step under the RIA is for the Chief Electoral Officer to refer the draft Bill to a select standing committee of the Legislative Assembly which must then either table a report recommending that the Bill be introduced in the Legislature at the earliest practicable opportunity or refer the Petition and draft Bill back to the Chief Electoral Officer for a province-wide referendum. As it is very unlikely that the Liberal government will subject the HST to a referendum, the upcoming Legislative session should provide for a fascinating political spectacle as our politicians debate the future of the HST, an opportunity that they were previously deprived when the tax was implemented without ever being considered in the Legislature.