Thursday, August 20, 2009

Running scared

There's good reason why the federal Cons are trying to escape responsibility for their choice to bribe provinces to shifting sales tax costs onto consumers. But let's take a quick look at just how much involvement the Harper Cons have actually had in pushing harmonization.

Of course, it started as early as the Cons' first budget after they took power, where the Cons made clear that harmonization was high on their priority list:
(T)he Government is committed to working with remaining provinces that want to enhance their economic competitiveness and productivity by harmonizing their retail sales taxes with the GST.
The Government invites all provinces that have not yet done so to engage in discussions on the harmonization of their provincial retail sales taxes with the federal GST.
Every budget since has also included a section demanding that provinces go along with harmonization. But the Cons' push to make individuals pay more in sales taxes didn't stop there.

In 2007, the Cons apparently figured that provinces might be more likely to go along if there was a pool of money waiting to be doled out. As a result, they set aside a $5 billion fund for the sole purpose of paying off any province willing to go along with the plan.

And needless to say, the Cons have been anything but silent on the issue in the meantime. Take this from an April 2008 Jim Flaherty speech:
We will continue to raise this subject, certainly looking for more stimulus in the Ontario economy in particular. We've done our stimulus at the federal level but we really needed the province to do its part, and of course we're also calling on the remaining provinces that have not harmonized their PST with the GST to work with us to accomplish that goal of harmonization.
Indeed, after Dalton McGuinty signed on, Flaherty was eager to take credit:
I really am quite encouraged today by the fact that the Government of Ontario decided to harmonize their PST with the GST. This is significant. We have a group of provinces in Canada that are still not harmonized—Prince Edward Island, Manitoba, Saskatchewan and British Columbia. With Ontario deciding to harmonize, this is a tremendous boost for business in that province. It means that 75 to 80 per cent of Canadian businesses will now be able to do business in a harmonized way with the PST and GST.
This is good economic policy, which we've been encouraging the non-harmonized provinces to do since 2006. So I am encouraged by that.
Of course, it's entirely in character for Larry Miller, Dick Harris and others to spend much of their time trying to point fingers elsewhere. But let there be no doubt that the federal Cons have done everything in their power to push the provinces toward harmonization - and while each of Ontario and B.C. had an opportunity to decline, neither would be where they are today if it wasn't for Jim Flaherty's single-minded determination to shift costs from business to consumers.

Update: More from BicCityLib and impolitical. Good to see some Lib bloggers pointing out the Cons' duplicity - though it's also worth wondering where their party will come down after initiating the first wave of harmonization in the '90s.

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