On selective pain

Shorter Dwight Duncan:

It's not that we want to attack our public servants. But what other choice do we have when a massive hole just seems to have spontaneously appeared in our budget?

On fixed rates

Jane Taber rightly points out Con MP Patrick Brown's misleading claim that he and his government had nothing to do with the HST despite voting for it twice personally. But that isn't the only glaring flaw in his attempt to distance himself from his government's policies.

Brown spends most of his column space criticizing the province for not lowering the HST rate while implementing the tax. But there's just one slight problem with that complaint: it's the federal government which has insisted that the province keep the rate right where it is.

I've noted before that the preliminary agreement between the Harper Cons and the McGuinty Libs provided that the province would be required to keep the HST rate where it is for at least two years following implementation. And that's made all the more clear in the comprehensive agreement that's since been signed between Jim Flaherty and Dwight Duncan:

15. The Parties agree that the PVAT Rate in respect of the Province will be 8% as of the Implementation Date.

16. The PVAT Rate in respect of the Province may be increased, or decreased, in accordance with the provisions of this Agreement after a minimum period of two years from the Implementation Date. Following that two-year period, any change in the PVAT Rate in respect of the Province, as permitted under the provisions of this Agreement, will not occur more often than once in any twelve-month period.

So if Brown wants to know why Ontario isn't talking about lowering its HST rate, at least part of the answer is that the Con federal government won't let it. And whether Brown is ignorant enough not to know that or dishonest enough to pretend his government hasn't tied the province's hands, it's fairly clear that his constituents don't have much reason to believe what he has to say on the subject.

On incomplete hearings

Shorter Dwight Duncan:

Having recently declared our latest bottom-line-and-this-time-we-mean-it on the HST, we've decided it might be a good idea to let the public have a single day's worth of say in the matter.

On shared responsibility

Interestingly enough, while most commentators have rushed off to follow a trail that immediately turned into a dead end, there actually was one fairly significant development on the HST front today which has gone mostly unnoticed:

Personal income tax cuts for Ontarians aimed at taking the sting out of harmonization won't be jeopardized if federal legislation to give the province financial compensation for the change gets derailed on Parliament Hill.

The Ontario government plans to introduce rules on Jan. 1 that would allow Ontarians to keep a larger slice of their paycheques regardless of whether federal legislation that is part and parcel of the province's tax changes also passes, Finance Minister Dwight Duncan said Thursday.
...
Mr. Duncan said the personal tax measures do not require federal approval or funding.

“We are proceeding as though the agreement will pass the federal house,” he told reporters.

Now, it's possible that Duncan's announcement might itself be largely moot in light of the Bloc's declaration that it will "probably" support the Cons' HST bill. But if not, then it looks like the Ontario Libs may have come up with the first successful strategy to actually split up responsibility for the HST and the set of policies linked to it.

Which isn't to say that the declaration comes without its costs, since it effectively negates the McGuinty government's own ability to pretend that the HST and income tax cuts are inextricably linked. But it does make clear that any federal vote on harmonization will affect only the more controversial part of the HST arrangement, sandbagging the Harper Cons with responsibility for the consumer price hike while taking full credit for the attached goodies which nobody wants to argue against.

The blame game

It's still not clear exactly what it will take to either put the brakes on the HST or turn it into a decisive issue in favour of the NDP as the lone party which has taken a consistent stand against it, But this kind of development would appear to be a major help on all counts:

The federal Tories pushed, prodded and ultimately paid Ontario to adopt the harmonized sales tax and any effort to disown those actions smells like a rodent, Ontario Finance Minister Dwight Duncan said yesterday.

"There are always rats in these debates," Duncan said, without naming any names.

"It's always funny to watch those individuals who are trying to deny the $4.3 billion their government is giving us. It's fun to watch."

Owen Sound-Bruce-Grey MP Larry Miller raised the ire of his provincial seatmate and fellow Tory Bill Murdoch earlier this year for disavowing his government's role in the tax, and Sarnia's Pat Davidson has been quoted as encouraging seniors to fight against the HST as well.

But Duncan said Ontario wouldn't, and couldn't, merge its retail sales tax with the federal GST for a 13% HST without plenty of encouragement and $4.3 billion of federal money.

"The feds certainly pushed us," Duncan said adding any doubt about where the federal Conservatives stand on the HST should be erased when Finance Minister Jim Flaherty introduces enabling legislation sometime before this coming March.

Of course, both the federal and provincial levels of government will have to try to justify the HST enough in order to pass legislation to implement it. But with both now engaged in finger-pointing as to who's to blame for tax harmonization (and at least some apparent concern within both governing parties), there's a significant possibility that Duncan and Flaherty will end up having far less attention to direct toward the task of convincing citizens to accept a tax hike for corporate benefit. And the more the ministers who signed onto the deal send the message that they don't want to take responsibility for the HST, the easier it'll be for HST opponents to convince the public that it's an indefensible choice.

On missed opportunities

Blogging Horse has a nice catch in highlighting Dwight Duncan's observation that Jack Layton and the New Democrats alone among the federal parties have shown "the guts to tell it like it is" when it comes to the needs of Ontario's manufacturing base. But wouldn't it have made more sense for Duncan to make the point a month ago when it could actually have had an impact on federal representation?