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Winnipeg Free Press - PRINT EDITION

Harmonized taxes HST now Ottawa's issue: province

By: Mia Rabson

Posted: 11/28/2009 1:00 AM | Comments: 0 (including replies)

OTTAWA -- Manitoba is staying out of the way when it comes to the national debate about harmonizing sales taxes.Finance Minister Rosann Wowchuk said Friday it's up to the federal government to worry about legislation needed to allow provinces to blend provincial and federal sales taxes into one.

Because Manitoba has decided not to do so for the time being, whether that legislation passes isn't of much concern to her at the moment, she said.

"This is the federal government pushing for this and it's up to the federal government to pass the legislation," said Wowchuk.

Finance Minister Jim Flaherty Friday introduced a motion to make the technical change required for provinces without harmonized sales taxes to implement them.

Ontario and B.C. have announced plans to move to an HST as of July 1, 2010. An HST saves money for businesses by taking the PST off most business input costs, the same way business inputs are mainly GST-exempt.

But it adds costs for consumers who will end up paying provincial sales tax on items not currently taxed -- everything from haircuts and movie tickets to new homes and renovations.

Public opposition against an HST has been loud in both Ontario and B.C., and opposition parties are leading the anti-HST charge. Federally, the NDP is also vocally against the HST.

The federal Liberals have also questioned the wisdom of an HST but are now in the awkward political position of having to decide whether to support Flaherty's bill, and allow the Liberal provincial governments in B.C. and Ontario to move forward with their plans, or vote against it in a bid to help win over voters in crucial ridings in B.C. and Ontario.

Their decision became slightly less daunting Friday when the Bloc Québécois suddenly changed its mind and announced it would support the HST bill, likely ensuring it passes regardless of what Liberal Leader Michael Ignatieff decides to do.

But should B.C. and Ontario end up harmonizing their taxes, the pressure on Manitoba to follow suit could mount as it will mean less than 10 per cent of Canadians are left without paying an HST. The decision to add an HST in those provinces was the only reason Manitoba began considering the idea in the first place this year.

Wowchuk and Premier Greg Selinger ruled it out for now because the offset incentives from Ottawa were not enough to ease the new tax burden on consumers in Manitoba at a time when economic growth is slow and people are still nervous about their jobs.

mia.rabson@freepress.mb.ca

Republished from the Winnipeg Free Press print edition November 28, 2009 A8

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