Wednesday, September 30, 2009

The Poison Pill

Although "poison pill" probably deserves to be added to the "overused political words" list, here's the latest on a possible poison pill:

The Conservative government plans to bring in legislation connected to the harmonized sales tax in the coming months, giving it the tool to bring about its own demise should Prime Minister Stephen Harper wish to capitalize on the Liberals' current misfortunes.

Government officials confirmed that the agreements under which Ontario and British Columbia will harmonize their retail sales tax with the federal goods and services tax call on Ottawa to bring forward HST legislation by March 31, 2010.


It seems obvious the Bloc would vote against this. The NDP would have a hard time supporting this but, you never know, maybe Jack will meet an unemployed single mother in Sudbury who pleads with him to vote for it, prompting a change of heart. Because, gosh darn it, he's thinking about the people!

But, failling that, the fate of the HST legislation would lay squarely in the hands of the Liberals.

Which would be, to put it bluntly, rather awkward. Having already split the party in Quebec, going to the wall against the HST would risk alienating many provincial Liberals in Ontario and British Columbia.

Which explains the rather...I guess the polite word would be "nuanced" position, that Michael Ignatieff has taken on the HST. In short: he's against it, it's a bad idea, but he'll honour the deal between Flaherty and the provinces.

So, given that, how do you vote against a piece of legislation you've promised to honour? Then again, how do you vote confidence in a government you've explicitly said you don't have confidence in? Presumably the Liberals will need to find an answer to one of those questions, unless Flaherty rolls the HST up into his next budget.

It's also a dicey situation for the Tories who probably don't love the idea of framing the election around their support for what is widely perceived to be a tax increase. After all, that makes it a lot harder for them to go on about Michael Ignatieff's secret plan to raise taxes.

So...yeah...fun times ahead!

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18 Comments:

  • I think the Tories wouldn't mind going to an election on this because it can be framed as not just their unilateral initiative (there's the BC and Ont govts) and it is not as necessary to be populist when something is going to get a lot of attention. The more time people spend considering the HST the more its policy merits will get through.

    Also more sophisticated urban voters might take another look at the Tories if they are making nice with provincial Liberals and are not demagoguing for once. If the Liberals lose these people they would have to make corresponding gains with small town and rural Canadians and a lot of these people might not give the Liberals enough of a chance to tip any ridings.

    By Blogger Brian Dell, at 8:31 PM  

  • Does Mr. Harper want an election? You think yes? I think no. Mr. Harper has nothing to gain from an election. He fears a majority. It will be impossible in my opinion to control a majority conservative caucus. Too difficult even for Mr. Harper I think. But can he even get a majority. No. the Bloc will sweep Quebec. It will be the same as before -- another conservative minority gov't. BUT with a new problem. Mr. Ignatieff would be forced to resign. That's bad for Mr. Harper.
    So, I don't think Mr. Harper wants an election. He just wants to govern as he is doing. My 1.5 cents!

    By Anonymous Anonymous, at 8:39 PM  

  • " Mr. Ignatieff would be forced to resign. That's bad for Mr. Harper."

    Because then us Liberals would be forced to put in our really real A team. The one that got crushed by Team Iggy last December.

    Look out Harper! This has been our plan since 2006!

    By Blogger Chuckercanuck, at 9:22 PM  

  • Like many liberals, I do not support this no confidence position. We may not have confidence, but pragmatism and flexibility things we seem to have thrown out the window.

    Canadians do not want another election. And if we force one on this, or some other issue, we will be punished. We have put forward no policy proposals, no plan to address the debt/deficit, and to put it bluntly we have not put forward a plan to show we can govern.

    Our drop and the conservative rise in polling numbers isn't about equal media time for the respective leaders, but about our bad decisions and ill advised posturing.

    My suggestion on how to get out of this, we hold an emergency caucus meeting, someone says they don't feel well, and every MP invokes a self-declared quarantine period because maybe, possibly, it's swine flu.

    By Anonymous Luke, at 9:40 PM  

  • @Brian: If the general public couldn't appreciate the policy merits of Dion's Green Shift, why would they appreciate the policy merits of Harper's HST? It may be great policy, but the anti side gives much better soundbite than the pro side.

    By Blogger leonsp, at 11:24 PM  

  • 1. Why isn't anybody out making the case for the HST. The feds are better at collecting taxes than the provincial government. Moreover, placing sales taxes on businesses (the status quo) not only harms competitiveness, but also effectively passes such taxes to consumers anyway (if you tax a diaper company, diapers get more expensive).

    2. I think it would be pretty opportunistic for the Liberals to vote down HST. This is a continued Liberal program, first brought in by Chretien in the eastern provinces (and was negotiated with two Liberal premiers). Moreover, the Liberals spent the last two elections making fun of a GST cut, and have mused about raising the GST. Finally, Ignatieff promised to honour the agreement anyway. So do they plan on voting down HST, then enacting it, plus the tax breaks to BC and Ontario?

    3. It isn't clear to me that this is a poison pill. For one thing the agreement with Ontario was made in March 2009. I'm not so sure Flaherty and Harper were like "6 months from now we will be ahead in the polls, and this will help defeat us. Dance puppets dance."

    4. I don't think this would make a good poison pill candidate anyway. HST in and of itself is not the kind of issue I would want to fight an election on if I were the government (despite its substantive benefits). A better poison pill would be something like party financing reforms - an issue where the public is with the Tories, but the interests of the opposition are dead-set against the reforms.

    PS: Graeme Mackay is Canada's best political cartoonist (although I don't care about Hamilton). Suck it, Aislin.

    By Blogger hosertohoosier, at 11:26 PM  

  • Does Mr. Harper want an election? You think yes? I think no.

    Agreed.

    If Harper wanted to go to the polls, he would have done it when Dion created the Coalition. He was in a much better situation then than now. And yet he engaged in whatever Parliamentary trickery he could (e.g. prorogue) to avoid it.

    And I agree with him. Anything can happen in an election, and they're best avoided by anyone in power.

    By Blogger Robert Vollman, at 10:41 AM  

  • To a certain extent I agree. I think Harper would just as soon keep governing - he likes governing and I don't think he can take the election for granted. Besides, if the economy turns around, he won't be any less likely to win.

    But with a weak opposition, now might not be a bad time for him to push the enveloppe a bit, and try to get through some policy they might otherwise vote against.

    By Blogger calgarygrit, at 11:21 AM  

  • Perhaps I'm missing something, but I can't picture a scenario where it makes sense for the Conservatives to cause an election over the HST. They want the news stories to be... "Opposition defeats government over bill to implement Harmonized Sales Tax"? Any nuances Iggy and others have to put on their position will be lost. The basic story will be that Harper wanted the HST and the opposition parties did not. The Liberals will take that ballot-box question any day. I just don't see it happening.

    By Anonymous I don't get it..., at 12:20 PM  

  • I think people may be getting a bit carried away with what is and is not a confidence matter.

    By Blogger paul.obeda@, at 1:45 PM  

  • “Why isn't anybody out making the case for the HST. The feds are better at collecting taxes than the provincial government. Moreover, placing sales taxes on businesses (the status quo) not only harms competitiveness, but also effectively passes such taxes to consumers anyway (if you tax a diaper company, diapers get more expensive).”

    Actually, 70% of people in BC are against harmonization. Why?

    The problem isn't so much with the economic tool. It's a good tool for the right situation. The problem lies with the government.

    The BC government (extreme conservatives who call themselves Liberals) will use the change in funds flow to promote their agenda. Tax cuts mainly for the high income. Spending cuts for the lower income.

    In BC, provincial sales tax had not been levied on food and services. With harmonization, PST will in effect be charged for everything. This works against the majority of consumers because BC has a small manufacturing base.

    By Blogger JimTan, at 1:47 PM  

  • paul.obeda,

    I think as tax issue, the HST bill is a money bill and is therefore a legitimate confidence issue. I think money bills are always confidence issues. (which is also why I think Dhalla's OAS Private Member's bill will fall on a technicality even before 3rd reading).

    But, back to the issue: if the G&M is right that the govt must introduce legislation by the end of March, that would be an ideal time for the Cons (if they were so inclined) to poison the pot: with the Vanc Olympics ending Feb 28 and the Paralympics on in March, I would think the Cons might be happy to capitalize on any glow left from those events by going to the polls asap afterwards.

    That may seem very cynical (which would be such a departure for Canadian politics /sarc), but as a Toronto Liberal, I hear a lot locally that that is one of the party's current biggest fears: Iggy's circle wants him to be PM before the Olympics (at least, that was the premise in Sudbury...).

    But as I said, neither party in Canada is THAT cynical, are they?

    By Anonymous Anonymous, at 2:19 PM  

  • I remember the Red Book back around 1993. It said that we would have a Parliamentary Committee look and the issue of the GST and make recommendations. That was the actual Red Book promise which was wrongly reported to be getting rid of the GST.

    The Committee reported in 1994, and suggested an HST. In "A Record of Achievement" (which 1996 document which listed the Red Book promises and assessed our completion of them) we wrote the following:

    "The government has not yet been able to achieve a full cross-Canada harmonized sales tax. However, significant progress has been made. (It then goes on to talk about the 1997 harmonization agreement).

    We should be consistent. We should support the measure saying that we promised it in 1993, and we are happy BC and Ontario have come along. Now we only need Manitoba, Saskatchewan, and PEI.

    Another promise kept, IMHO.

    By Anonymous Anonymous, at 3:31 PM  

  • Logically, the HST bill would be rolled up into the next budget...but the option exists for the Tories to introduce it separately.

    Regardless, I don't see them doing it before Christmas. As others said, it's not exactly the dream issue for them to campaign on.

    By Blogger calgarygrit, at 5:00 PM  

  • Budgets are about the government's spending plans. Taxes have little, if anything to do with this. So, the HST bill should not find it way into the budget.

    By Anonymous Anonymous, at 5:03 PM  

  • As I understand it, the feds only need some implementation legislation. But this is not a change in federal taxation: it is to enable a change in Provincial taxation.

    Unfortunately, the two Provinces currently working towards a HST have Liberal Premiers who have promised to raise additional tax revenue by collecting taxes on items which were not previously subject to PST.

    But it seems odd for more Liberals to suggest that a federal Conservative Government should fall because two Liberal Provincial Governments are increasing their taxes.

    By Blogger paul.obeda@, at 6:51 PM  

  • But the feds are giving money to the provinces as compensation for the HST, right?

    Wouldn't that have budgetary implications?

    (I'm just assuming, I'm not positive on this)

    By Blogger calgarygrit, at 6:59 PM  

  • Trying again (typed this a few hours ago but something didn't complete when I clicked Submit).

    The Liberal Ontario Provincial Government has mentioned a promise of $4.3 Billion from the feds for the transition to the HST, and said it is necessary in order to meet the July 1, 2010 timeline.

    I don't have any information to indicate whether this is to be funded out of an existing program and an approved budget, or if it's new money which has not yet passed the House through an Implementation Act or a fiscal allocation.

    If it's new, then I concur it would be a confidence matter. My comment earlier assumed this money was already allocated and not part of (or, at least separate from) the Bill to be put before the House, but that may have been incorrect on my part.

    Ignatieff, having said that he would not oppose the implementation of the HST (after forcing his Liberal colleague Dalton to issue a retraction of the earlier statement saying that Ignatieff supports the HST), will be hard pressed to oppose it in any event as a federal imposition into Provincial taxation.

    By Blogger paul.obeda@, at 10:56 PM  

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