Federal Liberals wouldn’t kill HST
When asked if the on-and-off prospect of a fall federal election could affect provincial plans for the harmonized sales tax, Premier Gordon Campbell insisted not.
“I would expect that any government would live up to the commitments that are made by previous governments,” he told my colleague Jonathan Fowlie recently. “We have an agreement with the federal government on how we’ll proceed with this. It’s with the federal government and we would expect it to proceed.”
Federal Finance Minister Jim Flaherty, who signed an agreement in principle with the province on the HST back in July, said pretty much the same thing on a visit to Victoria.
Ottawa has a standing offer for provinces that wish to harmonize their sales tax with its national goods and services counterpart. Transition money available on a per capita basis.
But as Flaherty underscored (with a nod to the concerns of federal Conservative MPs in a fiercely anti-HST province), the decision to climb aboard the harmonization bandwagon is “entirely up to the province.”
Still, there’s been some doubt about whether the B.C. HST could survive a federal election because of persistent sniping from the provincial contingent of federal Liberal MPs.
“The timing and execution of this tax has been terrible as it will hurt our tourism, home-building and restaurant sectors and exacerbate the job losses they have already endured during the recent economic downturn,” said Keith Martin, Liberal MP for Esquimalt-Juan de Fuca.
“It’s absolutely inappropriate and cruel for a federal government to be pushing harmonization in the middle of a deep recession when people are in economic difficulty,” declared Ujjal Dosanjh, the former New Democratic Party premier turned Liberal MP for Vancouver South.
Federal Liberals are trying to avoid the backlash against the provincial party that shares their name but not their structure, policies or even (despite overlaps) membership and supporters.
“People are not always clear which Liberals are at fault,” as my colleague Barbara Yaffe noted earlier this month.
But this distancing business has become increasingly complicated because of the different way the story is playing in the province of Ontario.
That province’s Liberal government is also engaged in harmonizing its sales taxes, and Premier Dalton McGuinty is adamant that the federal Liberals should not stand in his way.
After national Liberal leader Michael Ignatieff blasted the HST as “the Harper Sales Tax” during a visit to B.C., reporters asked the Ontario premier if the federal party’s opposition could derail his plans. The question triggered a drama in several acts.
Sept. 15: “We have secured Mr. Ignatieff’s commitment to moving ahead with the single sales tax should he earn the privilege of serving Canadians in government,” McGuinty told reporters.
Later the same day: After hearing protests from Ignatieff’s office, McGuinty issued a clarification. “Earlier today I indicated that Michael Ignatieff was supportive of the HST in Ontario. This is based on my understanding derived from a number of conversations between my office and Mr. Ignatieff’s office. In fact, there has been no formal agreement.”
Sept. 16: McGuinty demanded a clarification from Ignatieff. “I had the clearest of impressions that the federal Liberal party was to be supportive of our efforts to move ahead with a single sales tax in the province of Ontario. There appears to be some doubt now associated with that, so I will be seeking clarification at the earliest possible opportunity … it is very important that Ontarians know where he [Ignatieff] stands on this issue.”
Sept. 21. Pressed by reporters, Ignatieff conceded that the premier’s impression was correct. “It’s just not responsible for a party of government to say, ‘Well, we’ll tear it up and go back to ground zero.’ We’re serious, professional people. We’re not going to rip up an agreement that has been duly negotiated between a federal government and a provincial government.”
Sept. 22. The two leaders attended a plowing match and agricultural fair and, between the furrows, they brokered an understanding. McGuinty: “He is prepared to accept any agreement entered into between our government and the federal government and that is good enough for me.” Ignatieff: “I assured him the Liberal Party of Canada is a party of government. We don’t rip up agreements that have been duly negotiated by previous administrations.”
Sounds like a done deal for Ontario and presumably Ignatieff would respect the same sort of agreement regarding B.C. Presumably, too, he would hold to that position, were he in government himself or voting as a member of the Opposition on the necessary enabling legislation for the HST.
Mind, while Ontario and B.C. have both signed memorandums of understanding to harmonize sales taxes with Ottawa effective next July, neither jurisdiction has concluded a final “comprehensive integrated tax coordination agreement.”
B.C. was aiming to be finished by the end of September, meaning today. Instead talks continue, with officials on both sides expecting to finish soon.
That prospect, and the dwindling odds against an early federal election, mean that the final agreement on the HST will likely in place before Canadians go to the polls again.