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The Quebec government confirmed Friday it will not harmonize the Quebec sales tax with the announced federal GST holiday tax break, as Ottawa does not intend to compensate provinces over the measure.
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“I think that if the federal government had announced that it was compensating all the provinces for harmonization, I’m convinced that all the provinces would have harmonized,” Finance Minister Eric Girard told reporters at the National Assembly. “But that wasn’t the announcement.”
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Girard said the federal measure is temporary and “will have no impact on the economy.”
He was quite critical of Ottawa, suggesting that this decision was “a little unexpected” and even “improvised,” though “that does not mean that it is a bad measure.”
In contrast, he argued that his government was seeking to take measures “that have permanent and long-term effects.”
He also suggested retailers or manufacturers could benefit more than consumers by increasing their prices.
“It’s also not clear that the entire benefit will go to the consumer,” he added. “It’s possible that some of it will stay with the producers. There could be fewer price cuts.”
The federal government’s Goods and Services Tax (GST) vacation, which will be in effect from Dec. 14 to Feb. 15, affects dozens of items commonly purchased at Christmas, including children’s clothing and toys, video games and consoles, Christmas trees, restaurant and caterer meals, wine, beer and candy.
Five provinces — the four Atlantic provinces and Ontario — have harmonized their provincial tax with the GST. The temporary tax vacation decreed by Ottawa will apply to the entire harmonized sales tax, including that of the provinces.
In Quebec, however, the provincial government collects a 9.975 per cent Quebec sales tax, so Quebecers will see only a five percentage point drop in total sales tax on these items.
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