Canadian CEO want GST removed

[geoffrey]

Big release coming from the Canadian Council of Chief Executives, stating that GST should be scrapped in exchange for just PST.

The Federal transfer program would be axed to pair off the GST removal, and instead the PST would be raised in provinces that needed the additional transfer revenue.

This would be of huge benifet to Alberta, Ontario and BC. The rest of the provinces would probably suffer a little under extremely high consumption taxes (which many on this board say are great so I guess its no biggie).

I think its a great idea, give the power to raise money to the provinces.

Here's the story:

http://www.cbc.ca/story/business/national/...ceo-060221.html

[cybercoma]

Big release coming from the Canadian Council of Chief Executives, stating that GST should be scrapped in exchange for just PST.

The Federal transfer program would be axed to pair off the GST removal, and instead the PST would be raised in provinces that needed the additional transfer revenue.

This would be of huge benifet to Alberta, Ontario and BC. The rest of the provinces would probably suffer a little under extremely high consumption taxes (which many on this board say are great so I guess its no biggie).

I think its a great idea, give the power to raise money to the provinces.

Here's the story:

http://www.cbc.ca/story/business/national/...ceo-060221.html

Do you think provinces like New Brunswick could make it if they only had the 15% HST for themselves and no other transfer payments?

[mcqueen625]

Big release coming from the Canadian Council of Chief Executives, stating that GST should be scrapped in exchange for just PST.

The Federal transfer program would be axed to pair off the GST removal, and instead the PST would be raised in provinces that needed the additional transfer revenue.

This would be of huge benifet to Alberta, Ontario and BC. The rest of the provinces would probably suffer a little under extremely high consumption taxes (which many on this board say are great so I guess its no biggie).

I think its a great idea, give the power to raise money to the provinces.

Here's the story:

http://www.cbc.ca/story/business/national/...ceo-060221.html

Do you think provinces like New Brunswick could make it if they only had the 15% HST for themselves and no other transfer payments?

Not very likely, and the same would apply to the rest of Atlantic Canada, and Quebec.

[geoffrey]

Do you think provinces like New Brunswick could make it if they only had the 15% HST for themselves and no other transfer payments?

My personal feeling is that they would then have to find ways to make, learn how to get their economy going (which Lord has done alot to improve over the years, theres a reason he has that last name ) and get their people off the welfare burden they are stuck with.

They all have the resources and the labour force to do, so I say we give them a little kick in the pants encouragement to do so.

It probably wouldn't be that much different actually, even if they had to go to a 16 or 17% PST over a few years. I'm going to look into the exact numbers of their GST contributions and transfer out money later on once I'm done this work, I'll let ya know unless someone else gets ambitious in the mean time.

[cybercoma]

Do you think provinces like New Brunswick could make it if they only had the 15% HST for themselves and no other transfer payments?

My personal feeling is that they would then have to find ways to make, learn how to get their economy going (which Lord has done alot to improve over the years, theres a reason he has that last name ) and get their people off the welfare burden they are stuck with.

They all have the resources and the labour force to do, so I say we give them a little kick in the pants encouragement to do so.

It probably wouldn't be that much different actually, even if they had to go to a 16 or 17% PST over a few years. I'm going to look into the exact numbers of their GST contributions and transfer out money later on once I'm done this work, I'll let ya know unless someone else gets ambitious in the mean time.

That would be great if you could figure out the difference between the 15% HST revenues and what additional monies are needed from the federal government. Thanks in advance.

[geoffrey]

Do you think provinces like New Brunswick could make it if they only had the 15% HST for themselves and no other transfer payments?

My personal feeling is that they would then have to find ways to make, learn how to get their economy going (which Lord has done alot to improve over the years, theres a reason he has that last name ) and get their people off the welfare burden they are stuck with.

They all have the resources and the labour force to do, so I say we give them a little kick in the pants encouragement to do so.

It probably wouldn't be that much different actually, even if they had to go to a 16 or 17% PST over a few years. I'm going to look into the exact numbers of their GST contributions and transfer out money later on once I'm done this work, I'll let ya know unless someone else gets ambitious in the mean time.

That would be great if you could figure out the difference between the 15% HST revenues and what additional monies are needed from the federal government. Thanks in advance.

No thanks needed, I'm going to use this in an Econ paper.

[August1991]

The provincial governments would likely spend the money more wisely and there would be less waste (eg. Mirabel, gun registry, Point Lepreau).

Equalization payments would continue.

Harper is on record as saying that the federal government should keep to what it is assigned to do and make sure it does that well. By going off in to fields for which it has no strict competence (child care policies, municipal infrastructure), the federal government has managed to do everything badly.

Canada's natural resources, an accident of glaciers several thousand years ago, make Canada an exceptionally rich country. As Canadians, we have avoided one danger of such a windfall: we generally don't destructively fight over the spoils (unlike Nigerians, for example). OTOH, this wealth has allowed the federal government to be wasteful.

----

This is related:

Le Bloc Québécois entend soutenir le nouveau gouvernement Harper, du moins pour un certain temps, en raison de l'ouverture qu'il manifeste face aux aspirations québécoises.

Canoe

[Spike22]

Big release coming from the Canadian Council of Chief Executives, stating that GST should be scrapped in exchange for just PST.

The Federal transfer program would be axed to pair off the GST removal, and instead the PST would be raised in provinces that needed the additional transfer revenue.

This would be of huge benifet to Alberta, Ontario and BC. The rest of the provinces would probably suffer a little under extremely high consumption taxes (which many on this board say are great so I guess its no biggie).

I think its a great idea, give the power to raise money to the provinces.

Here's the story:

http://www.cbc.ca/story/business/national/...ceo-060221.html

A statement for a bunch old windbags(self included) which means absolutely nothing. Bottom line - they would love to boost their profits and sell more crap to you.

[geoffrey]

I've done a bit of a comparison for New Brunswick.

Total Direct consumption tax income from the PST @8% is 1,300,000,000.

Each percentage point is worth $162,500,000.

So if they added an addition 7% of direct consumption tax revenue, it would be an additional $1.13b.

$1.348b is sent in "Equalisation entitlments". New Brunswick is the highest per capita receiver of equalisation transfers (other than PEI, which is a special case), so this is the worse case scenario.

That leaves a shortfall of $218 million, which isn't actually a big deal. After their provincial surplus is deducted, we get only $175million... not an insurmountable obstacle. And remember, this is the worse case.

I think that this is definitely a plausible solution. The slight problem it causes to 1 province is worth the massive benifets to most of the others. Plus it cuts out a middleman in the whole system, which always saves in admin costs!

[cybercoma]

I've done a bit of a comparison for New Brunswick.

Total Direct consumption tax income from the PST @8% is 1,300,000,000.

Each percentage point is worth $162,500,000.

So if they added an addition 7% of direct consumption tax revenue, it would be an additional $1.13b.

$1.348b is sent in "Equalisation entitlments". New Brunswick is the highest per capita receiver of equalisation transfers (other than PEI, which is a special case), so this is the worse case scenario.

That leaves a shortfall of $218 million, which isn't actually a big deal. After their provincial surplus is deducted, we get only $175million... not an insurmountable obstacle. And remember, this is the worse case.

I think that this is definitely a plausible solution. The slight problem it causes to 1 province is worth the massive benifets to most of the others. Plus it cuts out a middleman in the whole system, which always saves in admin costs!

The problem we're going to have is that manufacturers will just raise their prices 7% when the GST drops. People will be so used to paying the tax, that the inflation in product prices won't mean muchto the consumer, but it will mean a 7% increase in profits for the guys making the stuff. In Ontario and other provinces which are capable of just floating an 8% PST with no increase, won't be negatively nor positively affected by the change. People will just continue paying what they've always paid. Provinces like New Brunswick who pay 8% PST and would have to raise it an additional 8% to make up the costs, would be paying 16% sales tax plus an additional 7% increase in pricing from manufacturers.

Of course, this is all speculation and one could only hope that competition between companies would stop them from driving up prices like that, but call me a pessimist....I think the companies will try to get as much money as they can out of a tax drop of that kind.

[Hicksey]

I've done a bit of a comparison for New Brunswick.

Total Direct consumption tax income from the PST @8% is 1,300,000,000.

Each percentage point is worth $162,500,000.

So if they added an addition 7% of direct consumption tax revenue, it would be an additional $1.13b.

$1.348b is sent in "Equalisation entitlments". New Brunswick is the highest per capita receiver of equalisation transfers (other than PEI, which is a special case), so this is the worse case scenario.

That leaves a shortfall of $218 million, which isn't actually a big deal. After their provincial surplus is deducted, we get only $175million... not an insurmountable obstacle. And remember, this is the worse case.

I think that this is definitely a plausible solution. The slight problem it causes to 1 province is worth the massive benifets to most of the others. Plus it cuts out a middleman in the whole system, which always saves in admin costs!

The problem we're going to have is that manufacturers will just raise their prices 7% when the GST drops. People will be so used to paying the tax, that the inflation in product prices won't mean muchto the consumer, but it will mean a 7% increase in profits for the guys making the stuff. In Ontario and other provinces which are capable of just floating an 8% PST with no increase, won't be negatively nor positively affected by the change. People will just continue paying what they've always paid. Provinces like New Brunswick who pay 8% PST and would have to raise it an additional 8% to make up the costs, would be paying 16% sales tax plus an additional 7% increase in pricing from manufacturers.

Of course, this is all speculation and one could only hope that competition between companies would stop them from driving up prices like that, but call me a pessimist....I think the companies will try to get as much money as they can out of a tax drop of that kind.

No offense, but I think you're missing the point altogether.

Yes, the GST would disappear. But the taxation itself would not. The power to administer the taxation would just be transferred to the provinces. So the GST would still exist, just in a new incarnation as an increase of each province's Sales Taxes.

Harper just wants to stick to matters deemed federal by the constitution and focus on delivering those services well. And by leaving provincial matters and the associated funding capabilities to the provinces they have no excuse to cry because they have inadequate funding. It places accountability with the provinces for providing funding for and providing the services that have been guaranteed by authority of the constitution to be administered by the provinces.

EDIT: I think this is the best idea I have have heard from any party yet. I went on record before the election saying that fixing the equalization inequalities between levels of government was something I'd forsake all tax cuts for in a heartbeat. This goes as far toward that as any proposition I have heard yet. Still much work to do to make this plan feasible, but definitely a step in the right direction.

[Riverwind]

This would be of huge benifet to Alberta, Ontario and BC. The rest of the provinces would probably suffer a little under extremely high consumption taxes (which many on this board say are great so I guess its no biggie).

The devil is in the details. Most provincial taxes do not tax services and are not value added (i.e. businesses do not get a credit for PST spent on inputs). If provinces hope to recover the income lost in federal transfers they will have to extend the PST to cover services. This will be politically unpopular in most provinces and will likely mean the provinces won't touch this proposal with a 10 foot pole.

That said, I hope Harper champions this idea - it is time to end the broken chain of accountability in this country. If a government has a power if must raise the taxes to pay for it. If it can't raise the taxes itself then it should give up the power. The only exception would some sort of equalization program that would help out some of the smaller provinces.

[geoffrey]

This would be of huge benifet to Alberta, Ontario and BC. The rest of the provinces would probably suffer a little under extremely high consumption taxes (which many on this board say are great so I guess its no biggie).

The devil is in the details. Most provincial taxes do not tax services and are not value added (i.e. businesses do not get a credit for PST spent on inputs). If provinces hope to recover the income lost in federal transfers they will have to extend the PST to cover services. This will be politically unpopular in most provinces and will likely mean the provinces won't touch this proposal with a 10 foot pole.

That said, I hope Harper champions this idea - it is time to end the broken chain of accountability in this country. If a government has a power if must raise the taxes to pay for it. If it can't raise the taxes itself then it should give up the power. The only exception would some sort of equalization program that would help out some of the smaller provinces.

The provinces wouldn't have to touch it, the feds would bring in these changes. I'm suprised to see such widespread agreement on this issue, especially from Sparhawk.