Crafty Smart Tax Job Claims

(Victoria, 12 July 2011) – IntegrityBC defies any independent economist to support claims by Smart Tax Alliance that some of the job creation numbers highlighted on its website as “Success Stories” are the result of the HST in any way whatsoever.

“Behind many of their stories are sweetheart deals, economic claims that defy logic, and good old-fashioned business sense, but not jobs genetically coded to the HST, because most of them were in the offing long before BC’s HST legislation was tabled in 2010,” said IntegrityBC managing director Dermod Travis. “There’s spin and there are fairy tales; and some of these claims are fairy tales.”

For instance, Smart Tax quotes Commonwealth Group of Companies CEO Dan McLaren claiming that “the HST formed a very important part of (their) decision to invest tens of millions of dollars into construction projects in Prince George;” McLaren added we have “recently undertaken an aggressive urban re-development in downtown Prince George. Over the past 6 months, our business completed a $10 million health centre and began construction of the city’s first major urban residential development.”

But Commonwealth was seeking financing for the project as late as September 2009, six months before legislation to introduce the HST was tabled. Commonwealth received $3.8 million from BC’s Northern Development Initiative Trust. Observers speculate that McLaren’s project may be linked to a possible campus for the BC’s College of New Caledonia, as well as a home for the provincially-backed Wood Innovation and Design Centre.

Commonwealth reportedly made $500,000 when his company bought the Prince George Hotel as part of the re-development for $2.2 million and shortly after sold the hotel’s beer and wine license to a buyer for $250,000 and the hotel itself to the City of Prince George for $2.5 million.

In its ‘Success Stories,’ Smart Tax highlights BC Mining Association President Pierre Gratton calling the elimination of the PST a “boon for B.C.’s energized mining sector” and that “it will help mines like Endako, Mt. Milligan and Huckleberry to protect jobs and create new high paying jobs.”

IntegrityBC believes the BC Mining Association is talking out of both ends of the drill when it credits the HST for being a “boon” and then not saying a peep about it when the group awarded Mt. Milligan promoter Robert Pease with the Mining Person of the Year award this May.

Instead the association noted that Pease, President and CEO of Terrane Metals, had “successfully obtained in 2010 all federal and provincial approvals to develop Mt. Milligan,” and led “the friendly takeover of Terrane Metals by US-based Thompson Creek Mining.”

Mt. Milligan is moving to the construction phase because it obtained regulatory approval to do so, not because of a comparative pittance in HST credits for construction costs; savings which could theoretically be wiped out by a minor drop in the price of gold.

In fact, Terrane’s Board gave approval “to proceed with the awarding of a contract for the procurement of long lead-time process plant equipment in 2008,” according to a company news release.

Endako’s expansion was put on ice in early 2009 by the mine’s owner, Thompson Creek Mining, due to low metal prices, three months before the last BC election and over a year before HST legislation was tabled.

“The HST may be creating windfall input tax credits for Commonwealth, Mt. Milligan and Endako, but all of these projects were well under way before the HST legislation was tabled,” said Travis. “Saying otherwise or claiming the HST is creating these jobs is disingenuous.”