Love it or hate it, the GST was a Progressive Conservative idea. It replaced a 15% tax on manufactured goods with a 7% tax on those goods as well as services not previously taxed. Recently the federal Conservatives have worked to reduce the GST to just 5%.

Now the Ontario Liberals are taking an 8% PST and harmonizing with the GST to create a broader tax of 13%. The harmonization itself may (CFIB) save business $100M a year in reduced red tape, and (Ministry of Finance) $500M a year in administrative costs. Consumers can expect (CofC) to pay $905M a year more in sales taxes, while companies (including the hard hit manufacturing sector) will pay $1.6B less.

This harmonization is long overdue and the Ontario government, along with the federal government who are funding the transition, should be given credit for making this change.

However, the combined HST will apply to a range of goods and services that are essential to Ontario families (gasoline, home heating fuels and personal services like haircuts) that were previously exempted from the PST. The exemptions were extended for some other items (like children's cloting, books and feminine hygiene.) Since the tax is being broadened and efficiencies are achieved, it should have been reduced.

I believe fiscal conservatism is about governments living within their means and maintaining taxes at reasonable levels. To me a tax rate of 10% is a reasonable level. When the economy takes a downturn, governments should prioritize their spending, eliminate waste, and invest in education, research and infrastructure projects that will have a long term payback. Short term deficits should be expected as long as a plan exists to return to balance.