Wednesday, September 09, 2009

Taylor lies and the Conservatives hide from the HST

The latest Conservative to try to hide from his government’s role as Harmonized Sales Taxes enabler is Blogging Tory poobah Stephen Taylor, who outrageously goes after Liberal MP Ujjal Dosanjh for making the point that the Conservatives, try as they might, can’t run and hide from their role in the HST or, if you prefer, the Harper Sales Tax.

Here’s the 10 per-center about the HST that has Taylor all riled-up:

Ujjal Flyer 2009


It’s all lies, says Taylor. Scandalous lies, oh, the humanity, and what not!

Dosanjh is fabricating by telling his constituents by blaming the unpopular tax on his main threat: the federal Conservatives.

Where are the lies, Stephen? It all looks pretty factual to me. (BTW, I love the irony of a Conservative complaining about lies in a 10 per center)

Let me put it this way: if the HST were a drug, BC would be the user, and the federal Conservatives the drug dealer.

The Conservatives can’t run and hide from their role in the HST, no matter how hard Taylor and much of the Conservative caucus might try. Not when their finance minister has been pushing the product for years…
"First of all, the decision to harmonize the GST and PST has to be that of the provincial government," (Jim Flaherty) said.

"I realize that this is challenging for provincial leaders, but I have no doubt in my mind that it's good long-term economic policy for our country.
...including in the budget...
Provincial sales tax harmonization is the single most important step provinces with RSTs could take to improve the competitiveness of Canadian businesses.
… and been offering any takers BILLIONS of dollars in incentives if they buy in.

How can the federal government say to provinces “we want you to harmonize your provincial sales tax with our GST, we’ll collect and administer the tax and send you your cut, and here’s a billion dollars and change to help with the transition” and then have its members and supporters claim they had nothing to do with it? It’s laughable.

If this is nothing to do with the federal Conservatives, why are they cutting the $1.6 billion cheque to grease the wheels?

Now, no one is saying the provincial governments aren’t responsible as well. While the lure of billions of federal dollars in the middle of a recession is strong, they are responsible too. But the Conservatives are the pushers here, and you can’t pretend otherwise. And to try to hide that is the real lie, Mr. Taylor.

To try to end on a more constructive note, Liberal MP Keith Martin wrote a recent op/ed with some thoughts on the HST matter. He notes that Harper and Flaherty pushing tax harmonization during a recession is irresponsible, and offers suggestions on how the province and the federal government can work together to implement it more responsibly.

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5 comments:

Lizt. said...

I live in Ontario, and I think the Ontario Liberals were against the HST until Flaherty jumps in, and dangles a nice cheque.
I myself do not like it. What happens to the money the year after..more from the Feds..or it is all up to the Ontario Government afterwards? We need our voices heard.....

Jeff Jedras said...

I think the transitional funding is one-time only.

The HST does make sense good in a lot of ways, the problem is there's a lot of things the GST covers that PST doesn't. The province should work with the feds so that more things are not taxed, rather than taxed.

Muskoka Liblog said...

Nice Ten Percenter!

I wish they'd send that to my riding.

bigcitylib said...

Transitional costs are one time only but the income tax cuts are, I believe, permanent.

I'm not sure whether I support or not, but the whole thing can be revenue neutral and still be a financial winner for the province. You get to scale back on admin costs. So it doesn't have to be a tax grab. But IS it?

Jeff Jedras said...

BCL,

That's correct, transitional funds one time, tax changes permanent.

Basically, instead of a business collecting both PST and GST, and remitting one to the province and one to the feds, they collect one harmonized tax, remit it to the feds, and the feds send the province their cut. It saves on admin time and costs for businesses, and for the provinces as well since the feds are doing the collecting.

The hiccup is some things that cost GST do not cost PST. But when you harmonize to the GST, and vice versa. But when you harmonize to the GST, they then do. So on some things where you paid GST but not PST, you now pay the HST, which is higher than the GST alone, so its a tax increase. On other things, its the opposite, and amounts to a decrease.

So, at the end of the day, I believe its all revenue neutral to the government. But there will be winners and losers. That's why the devil is in the implementation details.

It's also a dicey thing to do during a recession, when small increases in some areas are harder to absorb.

I'm far from an expert in this whole thing, but that's my understanding of it anyways.