McGuinty Willing To Study Merger With GST

Mr. McGuinty is the first provincial leader to comment publicly on the Harper government's reiteration last week that it would like to persuade British Columbia, Saskatchewan, Manitoba, Ontario and Prince Edward Island to harmonize their provincial sales taxes with the federal goods and services tax. Four provinces have already done so: Quebec, Nova Scotia, New Brunswick and Newfoundland and Labrador. Alberta has no sales tax. The federal government said it is willing to offer help to provinces to ease the transition but didn't specify if this would include compensation to make up for the revenue loss that would result. The former federal Liberal government first pitched the idea of harmonization in the 1990s. While it was billed as a savings for consumers, just the opposite happened. In Nova Scotia alone, residents paid an additional $84-million a year in taxes as previously exempt products became subject to the harmonized tax, according to a provincial study. The Harper government revived the pitch for tax harmonization in last spring's budget, arguing that the move would boost business investment. The harmonized tax does not apply to many items purchased by businesses to run their day-to-day affairs. And federal Finance Minister Jim Flaherty repeated the pitch last week when he announced plans to cut the GST by one percentage point to 5 per cent. ... http://www.theglobeandmail.com/servlet/story/RTGAM.20071107.wontariotaxes07/BNStory/National/ [Proofreader’s note: this article was edited for spelling and typos on November 8, 2007]

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