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Illustration by David Parkins for The Globe and Mail
Illustration by David Parkins for The Globe and Mail

Robert Silver

The HST trap Add to ...

"We feel strongly [about]this notion of him being an ideas guy," a senior Ignatieff strategist says. "It made him interesting in the first place and in recent months it was kind of ignored because I guess they [his old team, which was recently replaced]got scared by the 'just visiting' stuff. ... They kind of hid his light under a bushel." - Jane Taber's notebook earlier this week

Let's assume for the sake of argument that (a) the approach cited above is good politics (I certainly think so); and (b) is the approach that Peter Donolo will be following (I have no idea if that's the case).

If you accept those two assumptions then the Liberals have no choice but to support the HST legislation next week. It is good policy that previous Liberal governments supported. Opposing the legislation will come across as opportunistic and the worst kind of opposition politics ("the government supports this and therefore we must oppose it"). I don't even want to start thinking about the mess that will ensue amongst Liberals in Ontario if Ignatieff opposes what has become one of the cornerstones of Dalton McGuinty's economic plan. Ugly.

While I understand why some see the HST vote as a clever trap set by Harper to snare Ignatieff, this bill is not without risk for the Prime Minister.

Stephen Harper has decided this is not a confidence vote. On the one hand, it is a bit bizarre to me that this is not a confidence measure given the central role HST harmonization played in the 2008 Conservative budget. To refresh people's memory:

"Replacing remaining provincial retail sales taxes (RSTs) with value-added taxes harmonized with the GST is another area where provinces can contribute to strengthening Canada's Tax Advantage. Provincial RSTs impair competitiveness because they apply to business inputs, increasing production costs and deterring investment. By comparison, a value-added tax system provides most businesses with full tax relief through the input tax credit mechanism. Provincial sales tax harmonization is the single most important step provinces with RSTs could take to improve the competitiveness of Canadian businesses."

On the other hand, too many votes have been labeled as confidence measures in the past by this government and there is certainly an argument that this is not a money bill and therefore should not be a confidence measure.

Here's the interesting question: if it's not a confidence measure, does that mean Harper will allow all of his MPs a free vote on the HST? If he allows a free vote, how many of his MPs ( some have publicly opposed the HST already) vote against the bill?

If Harper's caucus were to split evenly, you could end up with a situation where the Liberals support the bill with one voice and yet the HST fails because the Conservative caucus opposes it, embarassing Stephen Harper in the process and causing real damage to the competitiveness of the Canadian economy.

For this reason, I would expect Harper to whip the bill and for this to sail through before Christmas.

(Illustration by David Parkins for The Globe and Mail)

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