OTTAWA - Canadian shoppers may not get the benefit of the GST cut to five per cent on Jan. 1 if the implementation bill containing the measure is stalled by opposition stalling tactics, Finance Minister Jim Flaherty said Tuesday.
Apparently frustrated by the continuing debate over the measure, mostly headed by the NDP, the finance minister told reporters after question period that the Jan. 1 date for cutting the GST from six per cent to five per cent was in jeopardy.
"I said yesterday 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,'' he said.
"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.''
Normally tax measures do not need passage of legislation in parliament before they are implemented, but Flaherty said the Canadian Revenue Agency (CRA) has told him it might be a "challenge'' to implement the GST cut without parliamentary passage of the bill.
"There will be a challenge with the CRA vis-a-vis a GST change and how it's handled by retailers,'' he said. "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.''
A spokesperson for the Canadian Revenue Agency referred calls to the finance department.
"The CRA has said it's challenging because it is a deduction at the cash register,'' explained Flaherty. "It's not as simple as a future tax change. They didn't say they won't, they said it's difficult to deal with.''
But NDP finance critic Thomas Mulcair called the finance minister's statement ''baloney,'' saying any tax measure can be implemented with the adoption of a ways and means motion. Flaherty's GST cut was announced in conjunction with a series of other tax reductions on Oct 30 and a ways and means motion was adopted in the House on Nov. 1.
Mulcair said his party will continue to oppose the tax implementation bill, even if it means the legislation will not be approved this year.
"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,'' he said, arguing that the tax cut will mostly benefit the oil patch.
Meanwhile, the Canadian Retail Council of Canada said they were not aware of any retailers who had expressed concern over the implementation of the GST cut, saying they are prepared to move ahead on time.
"Our position and the position of all our members is that we did this in the past and we'll be more than ready on Jan. 1 to make that GST cut,'' said Kim Furlong, vice president of federal government relations for the retail council.
"We're moving ahead on this unless told otherwise,'' she said.
