Dan Lett had a fairly good article in the Free Press the other day about HST:
It's amazing how quickly political stories can change.At the beginning of the week, the Free Press reported that Manitoba was considering a request from Ottawa to harmonize the PST with the federal GST. Manitoba has resisted federal pleas to harmonize the two taxes, but Finance Minister Greg Selinger confirmed he might be interested in what the federal government was selling. Manitoba was not "rushing" to harmonize, but the province was taking a good, long look at the proposal, Selinger said. Given the fact Ontario and British Columbia were moving to harmonize their sales taxes this year, after which the gross majority of provinces would have a HST, Manitoba had to consider getting with the program.
Ah, but that was Wednesday. By Thursday, the story had changed.
Premier Gary Doer, who was attending the annual premiers conference in Regina, had an entirely different spin on the issue. Doer told the Toronto Star he wasn't interested in harmonization. "The bottom line is we have opposed it."
In the course of two days we had a finance minister who was cautiously supportive of the HST and a premier who was decidedly skeptical.
But if anything will tip the balance in favour of the HST in Manitoba, it is the fact that the opinion leaders in the business community, including Manitoba's chambers of commerce, passionately support the idea. Why would business get behind a tax increase? Having to collect and remit a single sales tax, instead of two separate taxes, will save businesses tons of money.
I think Dan Lett was dead on on this part, when he discussed the motivations of this government.
Predicting Doer's final decision on the matter will be difficult given his propensity to keep his cards close to his vest. But there are some factors that should help make the outcome a tad more predictable.
First, while Doer is committed to being the NDP premier that never raises taxes, the more crucial long-term goal is to ensure that he does nothing to provoke the business community.
Doer fought to convince a lot of moderate conservative opinion leaders he was not a tax-and-spend New Democrat. Although enemies claim he is loyal to the NDP philosophy, many in the business community believe him to be the business-friendly socialist.
Political foes will jump all over the HST as a tax hike, but Doer will win much more support in the long run from the business community by embracing harmonization. And for that reason, we can conclude he is more interested than he's willing to admit. Being cautious is Doer's nature. But when it's all said and done, the tea leaves suggest Manitoba will have a HST.
Sadly, as a lot of people in Manitoba have learned through experience, Lett is pretty much dead on in his analysis of the decision making process at work (namely, give the business community whatever it asks).
I think Lett is right - give it a little while, so the government can say that everyone else is doing it and it's easier to hop on the bandwagon, and hope for some incentive from the federal government to smooth things over, and we're going to get an HST, I would guess before 2011, depending on how much political risk is calculated.