Jim Flaherty, the Finance Minister, and Raymond Bachand, his Quebec counterpart, have been negotiating a deal that would see Ottawa assume responsibility for collecting sales tax in the province and then rebating a portion to Quebec City.
This type of cost sharing is one more reason why Manitoba and Sask should be looking at implementing a HST.
For capital intensive industries, implementing a HST would create a significant boost to their competitiveness. In addition to saving the cost of PST on business inputs, these businesses also can eliminate a separate accounting system to track PST expenses and credits.
Even farmers like me who are supposed to be exempt would benefit because of reduced complexity of book keeping. One example was on my Hydro bill where I had been paying PST for several years. After spending some time and work, I have been able to get it rebated, but I would have been a lot better if it had been accounted for as part of the GST and simplified the process for securing the input tax credit.
One thing that should be kept in mind is to not repeat the mistake of Ontario and BC where they kept the rate the same even though the HST applies over a broader base. While some would suggest that the excess funds should be returned as cuts to income tax, I take the position that it is better to lower the rate of the HST on the broader basket of goods and services.
