Wednesday, October 31, 2007

Political Parties Have Reversed Positions on GST

When the GST was introduced in 1991 by Brian Mulroney's Conservative government, the tax was strongly opposed by the Liberals. During the 1993 election campaign, Chretian's Liberals promised to scrap the tax if elected. However, once elected he backed away from that commitment because Finance Minister Paul Martin was determined to reduce the deficit.

Liberal MP John Nunziata voted against his government’s first budget in protest of their flipflop on the GST and was later expelled from the Liberal caucus for doing so. Liberal MP Sheila Copps, then Deputy Minister and Minister of the Environment, had vowed to give up her seat if the Liberals did not eliminate the GST. In 1996, she honoured her pledge and resigned from Parliament, only to be re-elected in a subsequent by-election for her riding.

Move forward to 2006. The GST again became an important political issue in the last federal election. The Conservative Party, led by Stephen Harper, promised to reduce taxes by lowering the GST from 7 to 6 percent. The incumbent Liberals, in contrast, supported keeping the GST at seven percent, and lowering income taxes instead. Following the election, the new Conservative government included the GST cut in its first budget; the reduction came into effect in July 2006.

And the debate is being repeated this year as the Conservatives plan to reduce the GST once again to 5 percent. Liberal leader Stephane Dion has even stated that he would consider reversing the tax cut if elected. Where have we heard that type of promise from the Liberals before?

So the tax introduced by the Conservatives and opposed by the Liberals is now supported by the Liberals and opposed by the Conservatives.

And politicians wonder why voters are so cynical.

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