McGuinty, Ignatieff united on HST

Liberal Leader Michael Ignatieff's pledge to honour a contentious tax harmonization deal with the Ontario government was welcomed Tuesday by Premier Dalton McGuinty but denounced by a handful of angry farmers who heckled the federal politician in northern Ontario.

The two Liberal leaders seemed to mend fences over tax harmonization during a brief meeting at the annual farm event.  McGuinty stirred up controversy last week when he said he had an agreement with Ignatieff that the federal leader would support the HST if he became prime minister.

Ignatieff, who had derided the single tax as the "Harper sales tax" in B.C., was dogged for days about his stance on the issue, which has sparked protest in both provinces.

He finally cleared things up Monday when he told reporters that a Liberal government wouldn't block the multi-billion-dollar agreements the federal Conservatives signed with the provinces to harmonize their sales taxes with the GST.

Ignatieff played down any suggestion Tuesday that there had been a rift between him and McGuinty over the issue.

"I assured him that the Liberal Party of Canada is a party of government," Ignatieff said.

"We don't rip up agreements that have been duly negotiated by previous administrations, and I made that clear to him, and I think we're on the same page on this issue."

Ignatieff support 'anticlimactic'

Even before their talk, Ignatieff made it clear through the media that he would support the contentious tax scheme, McGuinty noted.

"It's kind of anticlimactic in a sense that he'd already made his position clear," the premier said.

"He's going to honour the agreement between our government and the federal government, and that — as I say — is good enough for me."

However, the tax plan isn't going over well with some farmers who gathered at a plowing match in Temiscaming, Ont., which is widely considered to be the biggest event of the year for rural northern Ontario.

The event attracts thousands of people, including federal and provincial politicians who take part in a parade before the festivities begin.

Ignatieff was heckled by a small group of unhappy farmers about the single sales tax as the Liberal float passed by.

John and Lee McIlwraith, a farming couple in their sixties, shouted at Ignatieff to stop the tax.

"What the hell?" he shouted at the Liberal leader.

The couple, who described themselves as lifelong Liberal voters, said they're concerned about the impact the HST will have on their cattle-breeding business in the southwestern Ontario town of Freelton.

"We get a lot of stuff now that we only pay GST on," said John McIlwraith. "Now [with] the harmonized sales tax, we're going to pay on everything 13 per cent."

They're so upset about the HST that they won't vote for either the federal or Ontario Liberals again, he said.

Ignatieff dismissed the heckling as the sole protest he heard during the hour-long parade.

Blended tax coming in July

Both Ontario and British Columbia are moving ahead with merging their provincial sales taxes with the federal GST starting next July, which will increase the cost of many items currently exempt from the provincial levy.

McGuinty said no one raised the HST with him at the plowing match, but said the plan will be an advantage for Ontario farmers.

The Ontario Federation of Agriculture predicts the plan will create between $20 million to $30 million in savings because it will put farmers "on the same playing field" as those in other provinces that have a single sales tax, he added.

Under the HST, farmers would no longer pay sales tax on items like trucks and computer equipment, McGuinty said.

But it will apply to things like gasoline and home heating fuel, said NDP Leader Andrea Horwath.

"What I'm hearing from people from northern Ontario is they're concerned the HST is almost like a double hit for them, because already gas prices for example are higher in northern Ontario than the south, so now it's going to be that much higher," she said.

Harmonization will impose a big burden on farmers, who'll lose their provincial sales tax point-of-sale rebate, said Progressive Conservative Leader Tim Hudak.

"It doesn't help anyone when you suck some $2.5 billion out of people's pockets by increasing the costs of goods and services through the HST," he said.