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Old May 3, 2006 | 9:22 am
  #31  
ALW
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Join Date: May 1999
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Of course, speculation is that the federal Conservatives are reducing the GST [...] to permit the provinces to increase their retail sales tax
In fact Quebec is already talking about increasing the TVQ. Unlike Ontario, their provincial tax is on the GST-inclusive price, so any reduction in GST will reduce the provincial tax revenues. Quebec's total sales-tax load is presently 15.025% (so 8.025% of the purchase price goes to the province) and a GST reduction to 6% will require a provincial tax of about 7.6% instead of 7.5% to maintain revenues. Or maybe they'll take the opportunity to switch to 8% and not tax GST, like Ontario (and thus freeing themselves from the vagaries of federal GST policies).

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