Saturday, September 12, 2009

Selinger suspicious of HST

A month ago, Dan Lett was speculating that Manitoba would eventually acquiesce to the harmonized sales tax. At the time, finance minister Selinger was "taking a good, long look at the proposal". Well, it seems he remains unconvinced:
Harmonizing Manitoba's provincial sales tax with the federal GST could end up costing the government over $400-million a year, provincial Finance Minister Greg Selinger said Monday.

Mr. Selinger is still considering federal Finance Minister Jim Flaherty's ongoing request to meld the two sales taxes - but suggested Mr. Flaherty is going to have to put more on the table than he has because the impact in Manitoba could be very costly.

"It's a different situation in every province," said Mr. Selinger.

Mr. Selinger pointed to a 2008 C.D. Howe Institute analysis which suggests Manitoba revenues would plunge over $200-million a year under an HST.

But that figure, he noted, doesn't account for offsets offered to consumers to help reduce the extra tax they'd pay under an HST.

More recently, according to Endless Spin Cycle, the Brandon Sun (which is behind a subscription wall, so no direct link) reports that Selinger is still not keen on the idea, saying "At this stage I don’t think it would be wise to implement it right now ... I keep an open mind on it, but the business case for it today was not good."

For what it's worth, I'm not keen on the HST either; the feds may be trying to bribe us with a large amount of money (an estimated $500 million according to the National Post article quoted above), but consider this: the current PST is on goods (most of which, like it or not, are imported and thus don't create jobs here), while the HST would result in adding more tax to services (which do create jobs here). So kudos to Greg for refusing to cave in to the pressure. Nor can he be accused of knee-jerk rejection of the idea; all he's saying is that after careful consideration, it doesn't seem that we should be doing it now. To my mind that's a good approach to an issue like this.

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