Finance Minister Colin Hansen tables the provincial budget in the B.C. Legislature in Victoria on Feb. 17, 2009.Jonathan Hayward/The Canadian Press
Today, the British Columbia government announced it will follow Ontario Premier Dalton McGuinty in moving to a harmonized single sales tax.
"B.C. cannot be left behind," Finance Minister Colin Hansen admitted when unveiling the reform, which will come into effect the same day as Ontario's move.
A single sales tax remains the most effective tool available to many provinces to spur job creation. At a time when unemployment is on the rise, this is a lever that few premiers will be able to resist pulling, despite the difficulty in explaining it to consumers.
In fact, B.C. Premier Gordon Campbell predicted that other provinces would join British Columbia in following Ontario's initiative.
There will be huge pressure on Brad Wall in Saskatchewan, Gary Doer in Manitoba and Robert Ghiz in PEI to shift their taxes to a more pro-jobs footing.
While on the surface the move appears to mimic McGuinty's March announcement, there are important differences in the details.
For one, British Columbia is not passing along federal transfer money to the taxpayers in the form of income tax cuts. Instead, the B.C. government appears to be using that money to pay for program spending.
Second, the B.C. government is not issuing rebate cheques, as Ontario did.
Third, British Columbia is exempting gasoline. This is smart politics, as the visibility of gas prices always makes increases a major irritant to consumers. However, there is the additional public policy argument that the escalating carbon tax the province imposed is already gradually raising the price of gas. The gas-pump sticker shock problem might have created both a political and economic challenge with too quick a rise .
Politically, this issue may be helpful for the NDP in British Columbia, devastated by their third loss in a row.
Running against the carbon tax in the last election proved a major strategic mistake, as it cost the New Democrats the endorsement of environmental groups and made them appear craven.
The single sales tax - with its inherent pro-jobs, pro-business attitude - makes a more appealing target for the left.
However, it's a long four years until the next election, and almost three between the imposition of the tax next July and the election in 2013. Consumer anger will likely have dulled by the time they get to the polls.
The B.C. policy shift is a major challenge for Ontario's opposition, particularly Tim Hudak.
The new Progressive Conservative Leader cannot come out as opposing a pro-business, pro-jobs policy like the single sales tax.
But he also cannot cede the field to the New Democrats, allowing them to corner the market on any populist misconceptions of this as a "tax grab."
He also is finding it very difficult to waffle on the issue, while simultaneously trying to stoke anger over the policy.
So Mr. Hudak has staked his reputation on forcing Dalton McGuinty to back off the single sales tax before it is in effect next year.
This is a bold commitment and one that will now be difficult to fulfill.
Were McGuinty a lone voice arguing in favour of harmonization, it might be possible to isolate him in the provincial media and turn this into a referendum in Ontario.
However, the addition of British Columbia to this question, along with lingering demands in Quebec that the province be compensated again as richly as Ontario was, makes this a national question.
Increasingly, the issue here is rising above partisanship. A centrist Liberal in Ontario, a right-wing Liberal in B.C. and a right-wing Conservative in Ottawa are all in favour, with a New Democrat in Manitoba, right-winger in Saskatchewan and Liberal in PEI as the next in line to join the shift.
Dalton McGuinty took a huge risk in his budget in March by promising this revolution in tax policy to create more jobs.
Today, McGuinty's gamble looks more likely to pay off, and the country will be better for it.