Tuesday, December 01, 2009

HST Decision

A few thoughts on the Liberal decision to support the HST legislation. Obviously, the federal Liberals are in a cramped position, although not as precarious as some would suggest.

Today's decision comes as no surprise, and frankly it was the right one. The federal opposition Liberals don't decide what elected provincial governments do, within their own jurisdictions. Had the federal Liberals decided to oppose, I'd question the federalism framework, clearly overstepping their bounds. At the heart of the issue, is the question of respecting the provincial desire, really apart from a debate on the merits of harmonization. People are free to interject their own agendas onto this decision, and that is where the "problematic" component lies. But, really that perspective is a political consideration, separate from the respective jurisdictional considerations. It's hard to fault the Liberal decision on a philosophical level, unless of course you endorse the incoherent message that Ottawa is right to thwart legally available requests from the provinces.

Voters have remedies available to express their outrage over the HST, and that anger should be directed towards those that brought forward the legislation. I'm not sure I buy the "guilt by association" wishful thinking, that places blame on secondary, after the fact, sources, who really are respecting the provincial will. There is a risk to the federal Liberals, but to date this is nothing more than speculation. I note that while the Ontario Liberals have stumbled in the polls, the NDP haven't advanced at all, voters have moved elsewhere. I notice the B.C Liberals falling flat, mostly because they hid this policy during the last election. I notice no corresponding UPTICK in federal NDP support for both Ontario and British Columbia. This fact suggests a separation, that this clearly provincial matter isn't spilling over to the federal scene. I know, I know, you just wait now, but really it's all speculation, so talk of "damage" is just that.

I'm not convinced that the federal NDP enjoys the credibility to really make gains on the HST issue. The only evidence seems to be retaining a seat in a quirky by-election, with dreadful turnout. Pretty much a whatever from here, or at best something I wouldn't dare draw any predictive conclusion from. Others will, but consider the sources. I think there's a real political opportunism component at play here, and the NDP as champions on the taxation issue, one has to wonder how much it resonates beyond the already sympathetic. This isn't to say a risk doesn't exist for the Liberals here, but it really does remain to be seen.

I'm glad the Liberals took an early stand here, instead of coming out on the fence, until the final decision had to be made. Effectively, the Liberals have taken the air out of debate, this will pass, so Ottawa will focus on other matters. Again, that doesn't mean the firm decision allows the HST to disappear, because others will ensure it doesn't, but only that it was the path of least resistance.

Respecting the will of the provinces. The horror.


BCL is in key.


Liberal Justice said...

I love your blog and I think this post is bang on. Ignatieff made the right call!

Francesco said...

Agree with you Steve,
The HST is a positive for the ontario economy and the NDP are playing with fool's god if they think they can make hay with it!!! Even the Toronto Star has come out in favor of it. IT was teh right decision by Iggy!!

Steve V said...

Honestly, I think federal Liberals should avoid debating the merits, because it's secondary to their role in this issue. It's a question of parliamentary responsibility and the constitution, and I'd leave it at that. Political opponents will try to draw us into a debate on the policy, but that's irrelevant. Let McGuinty and Campbell defend their own policy, it's not our fight and we can neuter all the partisan outrage if we stick to simply respecting provincial will. I would just add, pretty hard to see that argument costing us in British Columbia.

Frunger said...

You're right all.
When the Nat Post, Globe and Tor Star all agree on the same issue, it's probably fundamentally the right thing to do.

It's a bit of a complicated issue though, because the unwashed masses just think it's a tax hike. They can't see long term enough to realize that prices will drop on the cheaper input costs now that the PST doesn't keep stacking up behind the curtain. Only majority provincial governments with a lot of years left on their mandates would have attempted this.

Proof that often the good policy, bad politics decisions are only possible with a stable majority.


Harper majority

Möbius said...

Plus, it's actually the right thing to do, from the tax efficiency perspective. You can't go (far) wrong, if you do what's right, regardless of partisan politics, and remain consistent with your beliefs.

The Ontario Conservatives will not "scrap it" to use a familiar quote. More likely, after introduction of the new tax structure, they will run the next election on reducing it to a reasonable number, say 10 or 11%, and have a good chance of winning, if the Libs don't steal the idea.

Lou Arab said...

Um, argue the merits of the HST if you like, but if something requires a vote of federal parliament, it is (at least partly) federal jurisdiction.

Arguing 'we had to vote yes because it's not our job to decide' doesn't make sense. The Liberals were asked to vote yes or no. They voted yes. If they voted no, their would be no HST.

The constitutional arguments are just Liberal talking points designed to try and confuse the issue.

Steve V said...

Um, I don't think it's the place of the federal opposition to usurp the will of the elected provincial governments. Harper didn't even have to go this route, why must we play his game?

Marpman said...

The big controversy, at least from what I can see (in BC) is that the GST applies to items not currently subject to PST. Things like food and bicycles to name a few.
What I would like to see is companion legislation which would remove the GST on many, if not all, of these items. That would be a positive tax move. Actually, for a government which is all about removing or lowering taxes this would seem like a move they would have made already....we should never pay tax on food bought at a grocery store.

Anonymous said...

Marpman makes an excellent suggestion. The issue in BC hasn't been that your "harmonizing" taxes. It's that consumers will be taxed for things they haven't been taxed provincially before.

And it doesn't take a genius to see those items.

So if someone actually proposed "federalizing" reductions on some items, like grocery food, that could have real appeal.

I'm sure there are issues that can be debated about it, but it was my first thought when I read their comment so thought I'd give it a nod.

Tomm said...


Good call and, of course, Ignatieff made the right call too.

I think an argument could be made about whether he should whip the vote or not, but otherwsie, he is doing the right thing. The NDP is being needlessly ugly and partisan on this issue, but what else is new.

rockfish said...

I admit the arguments you've laid out and how Ignatieff has framed his decision seem almost palatable. Unfortunately, saying 'Yes' on the HsT is another issue where we walk lock-step with Harper, no matter the minutae. It also demonstrates that when it comes to listening to the public, we remain tone-deaf. Just as the perception is we stand for laxer laws, more bureaucracy and wilder spending (most of which are Harper hangups, I'd add), we are also 'for' higher taxes (as the public perception goes).
I wouldn't dare suggest we should have opposed it just to be different, but to argue that this tax hits people at the wrong time and has not been tinkered with (like removing it off food and feminine hygene products) to our liking would have likely won us support in two key provinces. Now our attack on Harper's raising people's taxes is now thinner and seems to be a false front.
I also think it shows that we just don't have an ear for politics; we can lay out some ungodly complicated (or just poorly communicated) policy like the green shift, but when it comes to something simple like 'keep taxes down' we don't have the stomach for populist politics. Maybe it won't matter - all I hear here in BC is anger at the BC Liberals, and little retribution to the CONs. People may just associate the whole thing as a Liberal tax, which Harper and Layton will be more than happy to capitalize on... I was ready to cancel my victory club membership over this, but i'll presently defer to you wiser types. But I don't think we score many points outside editorial pages and astute bloggers now. Prove me wrong kids.