Switch back to PST consumed, exhausted bureaucrats

VICTORIA – Exuberant British Columbians celebrated the power of direct democracy in August 2011 when they voted to kill the harmonized sales tax, but in the windowless, bunker-like rooms in the Ministry of Finance building across the street from the B.C. legislature, bureaucrats could barely hold back their tears.

“That was a sobering, sad, sad day,” said Jordan Goss, a finance ministry tax policy adviser in an interview this week.

“When that referendum result came down, we cried,” she said. “We had to keep our eyes from watering when the minister went to the press theatre.”

British Columbians had just voted in a referendum on Aug. 26, 2011, with a 55-per-cent majority, to dump the value-added tax many believed represented a sweet deal for businesses and others suggested involved a secret Liberal government plan to balance their deficit budget with federal dollars.

This past Tuesday night, almost four years after the Liberals introduced the HST in July 2009, the legislature unanimously passed its Provincial Sales Tax Transitional Provisions and Amendments Act — putting the final stake in the HST and paving the way for B.C.’s return to its former tax, the provincial sales tax, on April 1.

“As they say at the golf course, polite applause from the always appreciative gallery,” said Finance Minister Mike de Jong, who then saluted what he called the “small army of very talented taxation experts, located in a room just off site here.”

That praise may not adequately depict the work of the normally faceless and silent bureaucrats who toiled for the past four years to help introduce the ill-fated HST, only to preside over its merciless burial.

Those same people then dutifully resurrected the old PST, a task the usually publicity-phobic civil servants say was an ordeal and an accomplishment of near biblical proportions.

A team of 14 bureaucrats, including analysts, auditors and legal experts, hunkered down through the HST’s introduction and death and then through the rebirth of the old, but remodelled PST, which hasn’t been redrafted in 60 years.

Glen Armstrong, the finance ministry’s tax policy branch executive director, said he still can’t completely comprehend what the team accomplished.

He is convinced British Columbians will never know other than experience a sense of deja vu on April 1 with the return of the PST.

“In an ideal world, if one was going to rewrite a statute, this was going to be a four-year job,” said Armstrong about the government’s pledge following the referendum result to bring back the PST within 18 months.

“I don’t think that there’s any question that it is the largest legislative project ever undertaken and completed in such a short period of time. Certainly in British Columbia, and I would guess there are very few projects with the same number of people that would have been done in this period of time.”

Armstrong said he essentially spent that last 10 months — following last May’s passage of Bill 54, the Provincial Sales Tax Act — sheltering his 14-member team from their normal day-to-day ministry duties to allow them to work full out on bringing back the PST.

He said the team worked 80-hour weeks for months on end, sacrificing their personal and family time with no extra pay. The bureaucrats are excluded staff members and not eligible for overtime pay.

“As soon as the commitment was made to have the PST back on April 1, 2013, then you know what your finish line is,” he said. “Then you’ve got to do it. There’s no ifs, ands or buts, you’ve got to deliver.”

Armstrong said there was an emotional toll on his team, but nobody quit, even though he suggested his legal advisors could have easily bolted to the private sector as the most knowledgeable tax lawyers in the province.

“I still sit here and wonder,” he said.

Armstrong said the team approached the introduction of the HST with enthusiasm because many felt they were bringing a new and more efficient tax system to the province.

But that gusto was quickly challenged when British Columbians rebelled against the HST.

“What made bringing the HST so awful for the people who work here was there was 150 newspaper articles everyday complaining about it and the tsunami of it did not allow staff and officials to have the time to deal with all the issues that were being raised,” he said.

“We were swamped.”

Armstrong said the bureaucrats were insulated from the raging political debate and never commented publicly, but “who do you think is doing all the research and getting all the answers and providing all the information to the people who have to speak?”

Armstrong, like Goss, said the referendum defeat was a monumental let down.

“To work that hard and to put up with all that and then to just have it thrown out was very hard,” he said.

But the team devoted the same energy to rewriting the PST law “to put it back as well as you can to make it as structurally sound as you can.”

Goss describes the HST experience as the most exciting and rewarding of her career. But she said it took all the professionalism she could muster to tackle the PST.

“That was the best project I ever worked on in my life, the HST. It was exciting to me,” she said.

“As sick as it is, I’m passionate about tax administration. During this time, I would be saying to my husband: ‘Do you want to know something interesting?’ And he’d say: ‘Is it about the tax?’ I’d say ‘Yes.’ Then he’d say, ‘No.'”

Goss, who remembers sending PST transition emails on Christmas Eve, said she would have worked even more hours if she could have hired a nanny and housekeeper.

“We joke that our hourly wage was down to pennies,” she said. “Between the group of us, we were working 24 hours a day. Some are better working during the day, some of us through the night.”

Goss describes the last 10 months as a period where 14 people did nothing but work on bringing back the PST.

“I would not want to say it was fun, but there were aspects that were enjoyable,” she said.

“People were dedicated. You felt the support and it’s incredible how rare it is that you find good chemistry. The stars were aligned in making this work.”

Armstrong said the job isn’t finished as the government will soon be introducing PST regulations, which amount to about 200 pages of amended legislation covering where the tax applies and where it doesn’t.

The government must also get the word out to businesses that the old tax is coming back, which so far includes two mass mail outs, registration calls to 60,000 businesses, dozens of news releases and web-based briefings, requests for one-on-one consultations with finance ministry tax specialists and 66 seminars with business groups like the chamber of commerce.

Forty other similar meetings are scheduled during March.