I'd suspected the narrative over the harmonized sales might play out over a few weeks, so Dalton McGuinty could declare victory over exemptions rather than get all the political benefit up front. As it turns out, we evidently won't have to wait a few weeks to find out whether Ottawa and Queen's Park have legitimately set aside their differences.
On balance, the HST reflects well on everyone. McGuinty has taken a sizable risk, in order both to do something that he thinks will significantly benefit the economy and to try to set his government's recession response apart from others'. And Stephen Harper and Jim Flaherty have gone a good distance toward erasing from memory the silliness that characterized their relationship with Ontario during their first term, moving forward on a tricky initiative of mutual interest and keeping any political wrangling behind closed doors.
That being said, if we're going to armchair quarterback, there are a couple of aspects of the HST's introduction - at the provincial end, not the federal one - that are less than perfect.
The first concern is with the cheque that McGuinty's government will apparently be sending to most Ontarians to soften the impact of the tax changes.
Considering that it's purely a one-off - not a real counterbalance to any standing increases in the amount of sales tax Ontarians pay - this really does seem like more of a cheap attempt to buy goodwill than anything else.
On the bright side, because it's (presumably) a one-off, it won't contribute to any structural deficit. But for a Premier who's made so much of making investments with long-term benefit, of not getting sucked into feel-good gimmicks that don't do anything to restructure his province's economy, this one is hard to square. We'll see in a few hours just how much those cheques are going to cost the government over the next year, but it's going to be a sizable sum and you have to wonder if it couldn't have been better spent elsewhere.
The second bit of second-guessing is with some questionable strategy that could impact both McGuinty's political fortunes and consumer behaviour.
I get that the Liberals were looking to make a splash with the HST. I also suspect it was only recently that they extracted enough concessions from Ottawa to be sure they could move forward with it. But by not actively making the case for it until now, even as word slowly leaked out, they allowed opponents of the reform - opposition MPPs, interest groups, etc. - to frame the reform before the government did.
The result is that, save for a few supportive editorials, the discussion is much less about what good the HST could do for provincial industry, and much more on whether or not it's a tax grab. I don't think that it is - the province will be giving up other revenues because of exemptions om various business taxes, which at least in theory should be passed down to consumers. But that's a lonely argument to make when the government itself isn't making it.
With more than two years until the next provincial election, we're still in the very early stages of this debate. But if harmonization is as much about creative positive perceptions about Ontario's business climate as it is about reality, the Liberals have some work to do.