OTTAWA - Finance Minister Jim Flaherty says there's still a significant gap between the federal and Quebec governments on a compensation deal for the province's harmonized sales tax.
In its last budget, Ottawa committed to giving Quebec $2.2 billion in exchange for blending the federal and provincial sales taxes.
During the federal election, the Conservatives promised a deal would be struck by Sept. 15.
"I'm not saying it won't happen, I'm not saying it will happen," Flaherty told reporters on his way into a Conservative caucus meeting in Ottawa on Thursday.
"I'm saying that we've been working hard on it."
Quebec received no compensation when it blended its taxes in the 1990s and began asking for funds after provinces who harmonized later received federal support.
Among them was British Columbia, which now has to return the money after the HST there was killed in a recent referendum.
Quebec Finance Minister Raymond Bachand said he believes the federal government will still respect its promise -- give or take a few days.
"In negotiations, you start with the easy stuff, and at the end there are always one or two sticking points," he said outside a Liberal caucus meeting in Saint-Alexis-des-Monts, Que.
He refused to say what was holding up the deal, saying only it was complicated.
"I don't think it's wise to negotiate in public," Bachand said. "I don't think that's what Mr. Flaherty wants, and I don't believe it would be to his advantage."
Among the sticking points in negotiations has been the fact that the provincial and federal portions of the tax are not applied to all of the same products. Ottawa wants that changed.
In turn, Quebec has demanded it be given the power to collect the tax.
The May 2 election was in part prompted by the failure of the two sides to reach a deal; the Bloc Quebecois had suggested it would support the then-minority government's March budget if they included money for the HST harmonization.
But the Tories refused and the BQ helped the Liberals and NDP topple the government.
