PICKERING, Ont. - Ottawa is prepared to cut a cheque to three holdout provinces if they agree to merge their sales taxes with the federal GST, Finance Minister Jim Flaherty said Tuesday.
Ontario and British Columbia signed lucrative agreements this year to harmonize their taxes, with the federal government kicking in billions of dollars to ease the transition to a single tax.
Saskatchewan, Manitoba and Prince Edward Island could also get their share of federal cash if they jump on the bandwagon, Flaherty said.
"We'll see what their governments decide to do," he said.
"But the same proposal -- in terms of transition funding -- that we made with the province of Ontario followed by the province of British Columbia is available to those provinces as well."
Flaherty said he's talked to the provinces "from time to time" about tax harmonization, but wouldn't say whether any of them are planning to sign on.
Quebec, Nova Scotia, New Brunswick and Newfoundland and Labrador harmonized their sales taxes with the GST more than 10 years ago. Alberta has no provincial sales tax.
The decision to harmonize the taxes turned politically toxic for some governments when consumers ended up paying more for goods that were previously exempt from the provincial tax.
But Flaherty said it's an important step to put Canada back on firm economic footing.
"This is solid economic policy in the long run for Canadian businesses and therefore for Canadian jobs and for growth of the Canadian economy," he said after announcing federal funds for a waste water treatment plant in Pickering, about 30 kilometres east of Toronto.
The premiers will be meeting Wednesday in Regina, where the economic downturn will likely be a hot topic.
But Flaherty suggested that there will be no new stimulus cash, as current funds are sufficient to get Canada back on firm economic footing.
