Ignatieff and Liberals will support Harmonised Sales Tax

Ivison thinks that this action shows leadership but leadership that is not suicidal as was his earlier decision to bring down the Conservative government. Actually the other decision was not suicidal at all because the NDP stepped in to save the Conservatives . However, this decision may be quite unpopular with the general public and will help the Conservatives. Given the already steep dip in Liberal poll numbers this may just make it certain that the Conservative government can rest easy this Xmas and well into the New Year.


Ignatieff stares down his MPs
Liberals will support HST

John Ivison, National Post

Blair Gable, Reuters
There's a Spanish proverb that says if you sit by the river long enough, the body of your enemy will float by.

Judging by his performance so far, patience is not a virtue Michael Ignatieff has in abundance. Many Canadians have the impression that if he can't be prime minister, he'd rather return to his ivory tower at Harvard. But yesterday the Liberal leader gave an indication that he may be in politics for the long haul.

When he emerged from a caucus meeting, convened to discuss the Liberal response to the government's harmonized sales tax legislation, he said his party will support the HST bill that will pay British Columbia and Ontario billions in transition funding as they merge the federal GST with their provincial sales taxes.

It was not the first time Mr. Ignatieff has shown bold leadership in the face of opposition from a large number of his MPs, but it was the first time he has shown bold leadership that was not, at the same time, suicidal.

In Sudbury last September, the Liberal leader came out of a caucus meeting that was near unanimous in its opposition to a fall election and announced he was intent on sinking Stephen Harper's government.

Yesterday, he faced MPs who saw an opportunity to tap into bubbling public anger over the HST, and indicated his MPs will have to support it, which will irk those who view the controversial new tax as a gift horse.

The early reaction from those emerging from caucus yesterday suggested those who want to come out against the HST will hold their tongues.

Mr. Ignatieff had three options going into yesterday's meeting. First, he could back the Conservative legislation, on the basis that it was a request from provincial governments in British Columbia and Ontario -- a stance that could be defended because of the new tax's potential to improve competitiveness and create jobs.

Alternatively, he could have staked out the middle ground by saying that his party backed the HST in principle, just not this version. Liberal MP Keith Martin recently proposed a revamped HST that would have mitigated the impact on consumers -- for example, by exempting management fees charged on mutual funds.

Finally, Mr. Ignatieff could have come out, guns blazing, against the tax and pledged to repeal it, if he ever became prime minister. This would have enraged the Liberal governments of Gordon Campbell in British Columbia and Dalton McGuinty in Ontario but would have allowed the federal Grits to exploit anger about the imposition of what many people see as a blatant government tax grab.

That he took the first option points to an evolution in Mr. Ignatieff's political thinking.

In days gone by, he would have been tempted to plump for the middle-ground fudge, as he weighed the pros and cons of the policy. Harry Truman's plea for a one-handed economist "because all my economists say 'on the one hand ... on the other' ", is an equally valid observation to make about journalists and intellectuals like Mr. Ignatieff. As a senior member of his caucus said yesterday: "Michael is learning that politics is black and white, not grey."

The third option had the potential to be a game-changer and the possibility that the Liberals could come out against the HST was of serious concern to the Conservatives. But it would have been yet another flip-flop that would have added credibility to the Tory attack ad claim that the Liberal leader is only in it for himself -- particularly since it was the Liberals who proposed the HST in the first place.

His attempt to bring down the government in September, just as the country appeared to be emerging from the economic doldrums, reinforced the impression that Mr. Ignatieff is a self-centred political opportunist.

His decision to endorse the HST is designed to shift those perceptions and underscore that he is prepared to do the "right thing," even if it costs him votes in the short term.

The broader implications of what may turn out to be a defining decision is that it makes a federal election next year more unlikely.

Peter Donolo, Mr. Ignatieff's new chief of staff, has promised to play a long game and the decision to back the HST seems to confirm that. If the Grits were planning to push for an election next spring or fall, surely they would have come out against a measure that is likely to be reaching fever pitch in the run-up to its July 1 introduction? One Liberal MP agreed: "I don't see an election until spring 2011. We've got to lay some track."

Mr. Donolo understands that the Conservative government is only four years old and doesn't yet have the nicks and scratches that persuade voters it's time to trade it in for a different model. He understands that the time spent in Opposition is not wasted, which is the impression Mr. Ignatieff has given. Rather, it is a time when the Opposition defines itself as an alternative.

Mr. Ignatieff still seems to be a leader without a clue when it comes to the reason he wants to be prime minister. There remains a vacuum where there should be values, priorities and a sense of purpose. But there is some progress. He is starting to make good decisions as a result of the experience he gained from making bad decisions. It may be a long wait, but the prize may yet come to him.

© 2009 The National Post Company. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.

Sellinger (Manitoba) still not considering harmonizesd sales tax

Even though the Winnipeg Chamber of Commerce has been urging the Manitoba NDP to introduce the harmonized sales tax Sellinger so far has resisted. It is not a politically popular move although business groups such as the Chamber claim it will make the province more competitive. Sellinger claims there are other ways to achieve competitiveness. The short article can be found at CJOB.

Spector: Early HST legislation would put Ignatieff on the spot.

Spector is certainly correct. The HST legislation would force Ignatieff to support the Conservative govt. or vote against two Liberal premiers! But the tax is very unpopular in Ontario and moreso in BC. If Ignatieff did vote against the tax he would probably be joined by the Bloc and NDP and that would precipitate an election in which polls show Harper would do well. However, during the campaign the situation could very well change. Anyway it seems that none of the opposition parties are anxious for an election and so one of them will no doubt blink and save Harper.

Early HST legislation would put Ignatieff on the spot

Norman Spector for The Globe and Mail

Norman Spector
Published on Sunday, Oct. 11, 2009 8:16PM EDT Last updated on Monday, Oct. 12, 2009 2:34AM EDT
Prime Minister Stephen Harper's first minority government was one of the longest in Canadian history (the average tenure is about 18 months). And Mr. Harper could have continued to govern for who knows how long had he respected his fixed-election-date law.
Why the longevity? Although Mr. Harper ended up with fewer seats in 2006 than Paul Martin had won in 2004, the Conservatives needed the support of only one opposition party to survive. As long as one of the opposition leaders was not eager for an election, the Prime Minister could maintain confidence in what the Brits refer to as a “hung Parliament.”
In the 2008 election, Mr. Harper won more seats and still needed the support of only one party to stay in office. Yet, had he not persuaded Governor-General Michaëlle Jean to prorogue the House, his government would probably have been defeated by Christmas.
Why the difference? For some reason, the opposition leaders got it into their heads that Her Excellency was obliged to hand power to them if they defeated the government. When it dawned on Liberal Leader Michael Ignatieff that Ms. Jean could accede to the Prime Minister's request and call an election, that was the end of that.
For a while, at least.
A month ago, less than a year after the last election, the Liberals announced that they were withdrawing confidence in the Conservatives. And, for a few weeks, it appeared that Mr. Harper's time was indeed up, as Mr. Ignatieff put it. Until, that is, NDP Leader Jack Layton took a look at the polls and found virtue in supporting the government.
And, with the release of three polls in the past fortnight showing that the Conservatives may be headed to a majority, it now appears that the government is secure until next year's budget – though perhaps not much longer.
For the past week, the NDP has been positioning itself to thwart the implementation of a harmonized sales tax in B.C. and Ontario. While the Conservatives have met Mr. Layton's new tax-cutting persona with some derision (likening him, for example, to Colonel Sanders protecting chickens), the Prime Minister should not underestimate the anger of British Columbians, in particular, at the prospect of paying tax on previously exempt items. Nor should they underestimate the potential spill-over of this anger into federal politics, which could easily tempt the NDP to withdraw confidence in the Conservatives.
In this context, Mr. Harper would be wise not to wait until the spring budget to bring in his legislation. The Conservatives are in a strong position today, the opposition parties are in a weak position – and all this could change in a few months.
Were the NDP to oppose the tax-harmonization legislation – either now or in the spring – the Conservatives could make a pitch for the support of the Bloc Québécois. Its MPs have been seeking $2.6-billion in compensation for Quebec's agreement in 1991 to merge its sales tax with the federal goods and services tax.
But Bloc support would leave the Conservatives open to the charge in the next election campaign that they imposed a hugely unpopular tax on British Columbians and Ontarians with the assistance of a party dedicated to promoting the interests of Quebec.
Which leaves the Conservatives one good alternative to pass legislation that B.C. and Ontario will need to prepare their next budgets.
At their recent party meeting in Quebec, Liberal MPs were openly disagreeing whether they would systematically be voting against the Conservatives or whether they would vote case by case. A day later, according to Le Devoir, Mr. Ignatieff settled the dispute by indicating that his caucus would vote case by case, except for confidence matters, on which they would systematically vote to defeat the government. And legislation to implement the harmonized sales tax would be a confidence matter.
Recently, after a bit of to-ing and fro-ing between their offices, we learned that Mr. Ignatieff has promised Premier Dalton McGuinty that federal Liberals will respect Ontario's HST agreement with Ottawa. If the Conservatives bring in their tax-harmonization legislation in the coming weeks, the Liberal Leader will have a difficult decision to make. The fear of a majority Conservative government, were he to defeat Mr. Harper, should concentrate his mind wonderfully.

NDP says no to harmonized sales tax.

Layton claims that he will have a hard time supporting Harper if he introduces an HST law but he does not come out squarely and say he would vote against it. Ignatieff claims that he will not support any confidence motion but we will wait and see. The BC Liberals support the HST!

NDP says no HST

By Jeff Labine, tbnewswatch
The harmonized sales tax is a $4-billion bribe being given to Ontario by the federal governnent, says the leader of the federal NDP. Jack Layton , speaking Saturday outside a local doughnut shop, said the HST tax grab should lie squarely on the shoulders of the Conservative government, who must pass the legislation in the House of Commons for it to become law on July 1, 2010. “I say to Stephen Harper you may try to run but you can’t hide,” said Layton on Saturday. “This is your tax. Eight per cent on about one-fifth of the things consumers of Northwestern Ontario are buying,, right down to your double-double and your donut.” Layton said that the tax will not bring more jobs to Thunder Bay, but in fact will do the opposite, reducing jobs because people will have less disposable income to spend. The Ontario government said it will offer $10.6 billion worth of tax relief, over three years, when HST goes in affect. Layton said that if the tax comes in July as planned, it will gobble up all the relief money. “We don’t think it’s right; we don’t think it is fair. What we should be doing is getting the infrastructure money going. (Ministers) could have transferred the gas tax last spring and we would have had all kinds of construction on the go.” Calling on Harper to transfer the gas tax in the next stimulus package, the longtime political leader said it’s not the first time the NDP have fought the implementation of an HST-style blended tax. Several years ago it was passed in Saskatchewan by the sitting Conservative government. It lasted until the next election, when the NDP were elected and had it repealed. In Nova Scotia, where the HST has been in effect for several years, the provincial NDP are doing their best to minimize the effect of the tax. “Premier Darrell Dexter, who has just become the Premier of Nova Scotia, is taking the tax off home heating fuel. So he’s undoing some of the damages to families that was done by that tax. It is a burden people can’t bear right now.” The HST wasn’t all that was on Layton’s mind during his whirlwind tour of Thunder Bay last weekend. A few weeks ago Layton met with Harper to discuss employment insurance. The Conservatives came out with an unusual billion-dollar budget proposal in September, which has never happened before, said Layton, whose party decided to back the government in a confidence motion recently brought forth by the Liberals, a move that prevented a forced election from being called. “We want that money flowing to families. If we get a billion dollars to tens of thousands of families across the country then by golly we don’t want to go to an election until people get that help.” But that partnership could be short-lived, he adding, saying that if Harper moves to make the sales tax a law he would have a tough time supporting the Conservatives in a House of Commons vote. The Liberals have already vowed not to support the Tories on any confidence motion.

Harmonized tax to hit consumers hard.

Well golly gee at 77 I am so glad that diapers will be exempted from the new tax. Oh right I may end up wearing them forgot that! Anyway it is the Conservatives that are supposed to always be supporting business at the expense of the consumer but BC. and Ontario are both Liberal governments. Lets face it the business lobby is just more powerful than any consumer lobby and are able to get the ear of governments Liberal or Conservative. While businesses save 6.9 billion by the change consumers are gifted with a 1.5 percentage point increase on consumption tax at a time when many consumers are already reeling the effects of the recession.

Harmonized tax to hit consumers hard


Karen Howlett and Ian Bailey
Toronto and Vancouver — From Saturday's Globe and Mail
Consumers will bear the brunt of proposed tax changes in Ontario and British Columbia while businesses reap windfall savings of $6.9-billion, a new report says.
For the first time, economists have put a price tag on the value-added taxes the two provinces plan to introduce July 1, showing that the tax rate on consumption will jump 1.5 percentage points for consumers.
The report prepared by economists at Toronto-Dominion Bank could have caused a political headache in Ontario for Premier Dalton McGuinty. But the impact of its release Friday was somewhat blunted, having come one day after the Liberals sailed to victory in a by-election in the Toronto riding of St. Paul's, despite attempts by opposition candidates to turn the race into a referendum on the harmonized sales tax.
Ontario New Democrat Leader Andrea Horwath called the timing “awfully fishy.” A spokesman for Revenue Minister John Wilkinson said he was pleased with the report, regardless of the timing.
“It's probably the first time that people from the left, the right, the middle – people from all political persuasions have come together, as well as labour and business and seniors and students,” Mr. Vander Zalm said in an interview Friday.
Once the provinces combine their PST with the GST, the new tax will be 13 per cent in Ontario and 12 per cent in B.C.
Businesses will reap huge savings because they will be able to claim rebates. But consumers will end up paying the new tax on goods and services that are currently exempt from any tax. Both provinces have attempted to take the sting out of harmonization by exempting goods such as diapers.