Former Saskatchewan premier Grant Devine, whose government was the first to introduced a harmonized sales tax, said yesterday there's both pros and cons to that policy. Speaking on Public Eye Radio, Mr. Devine quipped, "I'm not running for anything so I can tell it exactly as I see it." The pro-side: "There's less expense (administering the tax system) because the feds are picking it up. Obviously, business gets the money back. You're a little bit more competitive regionally and internationally. The rules are the same no matter where you go across the country. So you have a combination of probably more economic activity on the business side, less government expenses because one government is handling it all."
But, he said, "in the short run you can have some significant complications" including the unpopularity of increasing the tax rate and taxing those who were formerly exempt from the provincial sales tax. "So you're looking at the fact that businesses are getting the rebates but ordinary families - that work for a salary - don't get any. So you broaden the tax base - which is good for the federal government generally. But, on the flip-side of it, people who didn't get taxed are now taxed. Some people get rebates and some don't or corporations do but the public doesn't."
The New Democrats repealed the Devine administration's harmonized sales tax when they swept to power in the same year it was introduced.