TORONTO – Manitoba or Prince Edward Island could be the next province to merge sales taxes, according to Ontario Premier Dalton McGuinty, who said Wednesday at least one of those provinces was likely to follow in his footsteps.
“I wouldn’t be surprised if we had another premier decide to move ahead with this, based on the conversations I had with Gary Doer and Robert Ghiz,” McGuinty said.
“There’s always been an understanding that, politically, this is a challenge, but I think there’s a growing consensus as well based on the conversations I had with other premiers in Regina, that this is the right thing to do.”
McGuinty wouldn’t explain whether he was referring to P.E.I.’s Ghiz or Manitoba’s Doer, saying only it was “hard to say, but we had good chats.”
Doer, who was in Regina with McGuinty and other premiers for meetings last week, told The Canadian Press Wednesday that while Manitoba was considering harmonization, a move like that wasn’t a done deal.
“We understood the door was open, we certainly will look at what’s on the other side, but just because it’s open doesn’t mean we’re going to go through,” Doer said in a phone interview with The Canadian Press.
“We’ve always believed it’s a shift from business taxes to consumers.”
The province was still looking for a way of lowering the impact the shift would have on consumers, Doer added, noting Manitoba was “very, very much in a state of due diligence rather than yes or no.”
“We certainly haven’t got to a place where that information allows us to make any kind of decision with this harmonization,” he said.
Business groups that have lobbied for harmonization argue it saves companies money by reducing red tape and lowering taxes on investment, but the change also broadens the tax base for consumers because the GST applies to more goods and services than the provincial levy.
Ghiz has indicated in the past that his province wouldn’t consider harmonization unless Ottawa makes it worth its while and grants P.E.I. exemptions on things like home heating fuel and clothing.
Ontario and British Columbia signed lucrative agreements this year to harmonize their taxes, with the federal government kicking in billions of dollars to ease the transition to a single tax.
Finance Minister Jim Flaherty has said Ottawa is prepared to cut a cheque to three holdout provinces if they agree to merge their sales taxes with the federal GST – Saskatchewan, Manitoba and Prince Edward Island.
Saskatchewan Premier Brad Wall has said he has no plans to pursue tax harmonization.
-With files from Steve Lambert.
