'No deal' on HST between Ignatieff, Ontario: McCallum

Federal Liberal finance critic John McCallum has countered Ontario Premier Dalton McGuinty's assertion that Liberal Leader Michael Ignatieff would support tax harmonization in the province if his party forms the next government in Ottawa.

McGuinty said earlier Tuesday that his government has "secured Mr. Ignatieff's commitment to moving ahead with the single sales tax should he earn the privilege of serving Canadians in government."

But speaking to reporters on Parliament Hill in Ottawa in the afternoon, McCallum said there "was some miscommunication" over McGuinty's comments.

"Mr. McGuinty's office is going to clarify that statement because there is no deal between our leader and the McGuinty government," McCallum said.

Ontario Finance Minister Dwight Duncan secured Ignatieff's support for the plan in conversation with the federal leader, although Ignatieff had "concerns" about the way it would be implemented, according to a provincial government spokeswoman.

It's not clear what those concerns are, but McCallum assailed the Harper government for giving Ontario billions of dollars to help blend the provincial sales tax and the federal GST.

"The Harper government pushed the governments of both British Columbia and Ontario to implement this and that's why we call it the Harper Sales Tax," he said.

"And the proof that they pushed is that they have subsidized Ontario to the tune of $4.3 billion to help them implement the tax and we suspect they will do something similar in B.C."

McGuinty had similarly hinted that the federal Liberals might have reached a similar agreement with British Columbia. The change requires both provincial and federal legislation.

"I believe that both B.C. and Ontario will secure the necessary commitments from any potential federal government to move ahead with a single sales tax, so I'm confident in that," McGuinty said.

'Absolutely horrendous'

Ignatieff, who has withdrawn his party's support of the minority Conservative government, has criticized Prime Minister Stephen Harper for using the economic downturn to push for a single sales tax across the country and accused the government of failing to take responsibility for it.

Liberal MP Ujjal Dosanjh, who represents a Vancouver riding, has described the Tory push for a single sales tax as "absolutely horrendous" and "criminal" in a time of deep economic recession.

Yet several federal Tories have publicly distanced themselves from the move, saying Ottawa had nothing to do with it — even though it's contributing billions of dollars to make it happen.

The move will increase the cost of many goods when it takes effect next July, which has struck a nerve with consumers in both provinces.

Protests in B.C., Ontario

Thousands of residents in B.C. and Ontario have already signed petitions protesting the tax change, which will hike the cost of coffee, funerals and even haircuts.

Moving to a single tax became politically toxic for some governments when consumers ended up paying more for goods that were previously exempt from the provincial tax.

The public uproar over harmonization in Nova Scotia and Saskatchewan in the 1990s contributed to the defeat of the provincial governments in both provinces.

Saskatchewan later repealed the single sales tax.

Nova Scotia, New Brunswick and Newfoundland and Labrador harmonized their sales taxes with the federal GST more than 10 years ago.

Quebec partially harmonized its sales tax system, and Alberta has no provincial tax, leaving Saskatchewan, Manitoba and Prince Edward Island as the remaining holdout provinces.