Last week Kootenay East MLA Bill Bennett mounted a vigorous defence of the government's controversial Harmonized Sales Tax (HST) which is expected to be passed in the upcoming session of the legislature, that begins today.

This week, the critics are having their say and some of them include some of Bennett's strongest supporters.

Probably no sector of the economy will feel the impact of the tax more than restaurant industry where customers will be forced to pay seven per cent more for their meals.

And few could have a better appreciation for what that could do to business than Dave Kaiser, the owner of the McDonald's franchise in Cranbrook. Kaiser says he agrees with some of the points Bennett made when he spoke about the GST at the Sunrise Rotary meeting Feb. 2. However he also found some of his remarks “somewhat misleading.”

“I do agree with Mr. Bennett that the Liberal government has introduced many measures of tax relief since 2001 to make our province very competitive. However, the HST will not go down in history as one of them.”

Kaiser says when the GST was introduced in the early 1990's the immediate result was a seven per cent loss of sales in the fast food industry. This caused layoffs, especially of young people, and hit many small businesses very hard.

Despite the economic benefits of the HST touted by Bennett “the fact remains that this piece of legislation is a tax increase,” says Kaiser, adding the advent of the controversial tax means British Columbians will now be taxed on dozens of consumer items that they weren't taxed on before.

“In my opinion, the effect of HST will be lost consumer purchasing power,” he says. “If you buy less, businesses will lose revenue and the cascading effect will be a loss of economic activity. This is not great news for a slumping economy.”

Another businessman dismayed by the news tax is Heritage Inn General Manager Colin Johnston. “I think Bill is missing the boat on this one. I truly believe it will hurt my people that work for me. You raise the meal seven per cent, well who's going to pay that seven per cent? Are you still going to pay it out of your 10 or 15 per cent gratuity? It's got to give somewhere.”

In an open letter Jan. 29 to Premier Gordon Campbell and Finance Minister Colin Hansen Garth Whyte?President?of the Canadian Restaurant and Foodservices Association says restaurant meals should be exempt from the notorious tax.

Not exempting restaurant food from HST will be devastating to our industry and our employees, just as the implementation of GST was in 1991.  The new tax comes at the worst time for the struggling foodservice industry.  The drop in sales resulting from a new 7% tax – while competitive food products in grocery stores remain completely tax free – will have an enormous job loss effect,” says Whyte.

In recent weeks, some 200,000 restaurant customers have signed a petition against the tax, he says.

Columbia River-Revelstoke MLA Norm Macdonald accuses the government of breaking a written commitment not to implement the tax. “There is something fundamentally dishonest about hiding such a massive tax shift from people during an election. The HST will add almost $2 billion to the backs of consumers.”

The NDP MLA says he doesn't buy Bennett's argument that the HST will be good for the struggling forest industry. “With the GST on the horizon, we lost 535 more forestry jobs last week. This brings the total of lost forestry jobs to almost 30,000 since Mr. Bennett and the BC Liberals took over.”

Macdonald says the GST will be a “job killer” for the tourist industry in the Kootenays and will be a massive burden on everyone. But Kootenay Rockies Tourism President Chris Dadson doesn't see the effect of the HST in such negative terms.

“It (the HST effect) really varies right across the board,” he says. In the case of accommodation, sales tax harmonization actually reduces the tax burden on overnight hotel charges by one per cent, he says.

“It depends on the type of vacation you're coming for,” he says, adding hotel guests will save one per cent and the hotels themselves will save by having input tax credits on their major capital purchases thanks to the HST and will pass the saving on to consumers.

However Dadson acknowledged there is some concern about this. “There are many sceptics out there about this happening, but that's really the intent of it all.”

Meanwhile NDP finance critic Bruce Ralston says it will be the most vulnerable members of B.C. society that will be hurt the most by the HST because they have the least to begin with. The non-profit agencies trying to help them will also be impacted, he says.

“Social service agencies are worried they will have to cut services if the HST comes into effect. Non-profits are already strapped and can't afford to pay a new tax.”

But a spokesman for BC Colleges welcomes the news that the BC government will provide Harmonized Sales Tax (HST) rebates for schools, universities, public colleges and hospital authorities. Victoria says BC's 11 public colleges will receive a 75 per cent rebate of the provincial portion of the HST.

"This rebate will help ensure that BC Colleges can continue to fulfill our mandate to provide a diverse array of programs that are accessible, affordable and responsive to the evolving needs of BC communities and industry," says BC Colleges Chairman, Jim Hamilton.

But Ralston says “one-off” rebates won't make up for the $1.9 billion tax shift to consumers. “British Columbians have every right to feel betrayed. For the Liberal government to think they can now buy people off with piece-meal rebates is simply ridiculous. The HST doesn't need cosmetic changes. It needs to be scrapped.”