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Liberals could reverse GST cut: Dion
Politics Watch « News Services
October 30, 2007, updated 1:45 p.m.

Liberal leader Stephane Dion.

OTTAWA  (PoliticsWatch.com) —  Liberal leader Stephane Dion said Wednesday if elected the Liberals may raise the unpopular Goods and Services Tax. 
Dion's comments came hours before his party planned to abstain in the House of Commons, allowing a government ways and means motion that would introduce $60 billion in new tax cuts to pass. The tax cuts include lowering the GST one percentage point effective January 1, 2008. 

The one-point cut would bring the GST to five per cent from the current six per cent rate. It's the second one-point cut the Conservatives have made to the tax since being elected last year. 

"We will consider if in our plan we need to revisit the decision of the government about the GST. We'll consider it," Dion told reporters after a Liberal caucus meeting. 

"It's $34 billion. That means six to seven billion dollars every year on an ill-advised choice and so we will make this debate. We will not be alone. We know that a lot of people will say it is the wrong decision for Canada and when the election will come we'll say to Canadians what we'll do with it."

While economists are in agreement that income tax cuts are better than cuts to consumption taxes like the GST, a reversal of the tax cut may not sit well with average voters and would likely be politically unpopular.

Dion's comments stunned most Press Gallery reporters in attendance at his scrum, especially given the questions that have been raised from Liberals over recent weeks about his ability to lead the party. 

As Dion spoke, reporters immediately started firing off BlackBerry messages and contacting Liberal caucus sources to inform them of their leader's latest comments. 

A senior Liberal later explained to reporters that there are other priorities for the federal government than cutting taxes, such as infrastructure, and average people may not be so happy with their $13 a month savings from the GST cut "when the Gardiner Expressway comes crashing down on them." 

The Liberal's forceful and vivid spin against cutting the GST prompted one reporter to quip, "Why didn't Dion say that?" 

Dion's public musing about raising the GST means the Liberals have come full circle from their position in the early 1990s when then Liberal leader Jean Chretien promised to scrap the much-detested tax if elected. 

When the Liberals broke that promise Canadians were so outraged that Liberal cabinet minister Sheila Copps resigned to uphold a commitment she made to a television audience during the 1993 campaign if the tax wasn't rescinded. Copps was later re-elected in a by-election.  

Despite Dion's criticisms about the GST cut, the Liberals will for the second time in two weeks abstain on a confidence vote and allow the new tax measures to pass in the House of Commons. The Liberals are trying to avoid forcing a federal election which most polls show they cannot win. 

When asked by reporters how many times the Liberals can abstain in Parliament without looking weak, Dion said, "Canadians understand, I think, that we are strong for them and we will choose our time to defeat this government."

Liberal foreign affairs critic Bob Rae declined to positively spin repeated Liberal abstentions when asked the same question by PoliticsWatch.

"I think that's a question that you should direct to Mr. Dion and the House leadership because I'm not in the House."

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