Is B.C. headed for an economic collapse of Californian proportions?

B.C. Premier Gordon Campbell is experimenting with direct democracy in an attempt to salvage his reputation. He's hoping it works out better there than it has in California.

It’s difficult to predict what political issue Canadians will become passionate about: a non-existent hockey arena, a gun control program that affects a sliver of the population ... Watergate, these are not. But you can add to that list the harmonized sales tax, which has led to a virtual electoral revolt in British Columbia. B.C. and Ontario introduced the tax last summer, and since then B.C.’s Liberal Premier Gordon Campbell has faced a massive backlash. He’s finally buckled, and has promised a referendum in September 2011 to determine whether the tax will be scrapped.

Good call, says the Vancouver Sun. Much of the furor was caused by the fact that the Liberals campaigned on a promise not to introduce the tax, only to implement it months after the election. The decision to send it to a vote “restores to Campbell some of the credibility he has lost through the high-handed manner in which the tax was introduced.”

The Victoria Times Colonist is hoping the referendum will put an end to the HST issue for now. “HST protests consumed the government's agenda for more than a year,” says an editorial today. Now Campbell “should move forward in other areas -- remaking education, restoring parks, rehabilitating the health-care system and much more. The Liberals should, in short, govern.”

Referendums on tax policy are dangerous however, warns a Globe and Mail editorial. Taxes are always unpopular, and “(m)any U.S. jurisdictions flirting with financial ruin can testify to the perils of direct democracy in budgeting, such as California, still hampered by a decades-old, referendum-driven restriction on property tax changes.” The Globe editors assert “The right time for the people to rule on a government’s tax policy is during a general election.”

Whatever the outcome of the referendum, it’s going to be a headache for Ontario Premier Dalton McGuinty, says the Globe’s Adam Radwanski. The vote is scheduled for September 24, 2011 and “will put the HST in the national spotlight smack in the middle of Ontario’s campaign – reminding voters that other Canadians are deeply aggrieved by the same policy imposed upon them.”