Thursday, October 26, 2006

Commons to review GST rebate elimination

Last month, I noted that God's Annointed Servant (TM) wants to end the Visitor Rebate Program, which refunds the GST to non-residents visiting Canada. Among my beefs with this budget cut was the possible negative impact on the tourist trade which could be far greater than the supposed savings.

Score another one for the Opposition. The House Finance Committee has ordered an investigation into whether it actually makes sense to cut the VRP. The Liberals, NDP and Bloc, which make the majority of the panel, outvoted the Conservatives. Of particular note is the impact it will have on Summerside, Prince Edward Island -- the home of the GST processing centre and one of the income tax filing points. Some readers may recall the taxation centre, created around the time the GST was imtroduced, was part of a compromise worked out with the late Joe Ghiz -- when the province's only military base was shut down after the end of the Cold War.

Oddly enough, the GST proved to be a revenue generator far beyond anyone's wildest dreams -- even that of Brian Mulroney who stiffed us with it. PEI has been an unexpected beneficiary since it's the "home" of the excise tax, and since it does not harmonize the GST with its provincial sales tax unlike the other Atlantic provinces and Québec.

Guess it's no coincidence that the Cons want to cause an economic crisis on the western part of the Island because all four MPs from the province are currently Liberals. So are the three Senators currently representing the province (there is currently one vacancy). Patronage has always been a part of Canadian politics, especially Down East. But spite is not a reason to create efficiencies in government, especially when thousands of other jobs tied to tourism are at stake.

So now the Opposition has the upper hand on this as well as Kyoto and Kelowna.

Anyone want to hazard if Harper will call a snap election before the Liberal leadership convention next month?

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