TORONTO - A powerful business lobby is pressuring the McGuinty Liberals to merge the province's eight per cent sales tax with the five per cent goods and services tax.

However, the move would impose Ontario's eight per cent sales tax on items that are currently exempt, including new homes, books, heating fuel, children's clothing and diapers.

The Canadian Council of Chief Executives says combining the sales taxes would be "the single most powerful measure" the province can take to encourage business investment.

The council has written Premier Dalton McGuinty asking for a clear commitment in the March 26th budget on tax harmonization.

McGuinty says it's an option he's considering.