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Flaherty Warns That Opposition Stalling Could Scupper GST Cut Plans

by Mike Godfrey,, Washington

13 December 2007

Canadian Finance Minister Jim Flaherty has this week voiced concerns that delays by the opposition could jeopardize the timing of the consumption tax cut that was to go into effect from the beginning of 2008.

Flaherty has directed blame at his opposition, the New Democratic party, and has spoken out to address the concerns of retailers who are confused as to whether they will be needing to make the necessary amendments from the beginning of next year.

It is not certain whether the cut, which was to see GST drop from 6% to 5%, will now take place in the time frame sought by the government.

According to reports in the national and international media, Mr. Flaherty told journalists that:

"I said previously the bill was moving ahead and was likely to get through the House and Senate before Christmas, now we have the NDP blocking progress of the bill right in the House of Commons. That does put into jeopardy the GST cut. And this is not a good time for that. Our retailers are trying to keep Canadians in Canada, we're trying to keep Canadians shopping in Canada, and one of the ways to encourage that is to reduce taxation.''

Usually, this kind of Parliamentary process is not necessary for the implementations of tax measures, but the Canada Revenue Agency (CRA) had suggested that if legislation covering the tax cut was not put in place, certain "challanges" could be raised.

"There will be a challenge with the CRA vis-a-vis a GST change and how it's handled by retailers,'' Flaherty stated, according to the Canadian Press.

He continued: "I hope we don't get into that issue, I hope the bill passes in the normal course. We have lots of support in the House, we know it will pass if the NDP lets it get to a vote."

But NDP Deputy Leader, Thomas Mulcair retorted, according to the report: "Our objection is less with the one per cent GST cut than the across-the-board tax cut for corporations, which we think is going to be more destabilizing for our economy."

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