Carbon Tax, GST Hike — What's Next?

Several months ago, Stephane Dion announced that he'd consider "revisiting" (in other words - cancelling) the GST cuts if he were to form a government. As it turns out he didn't relinquish those plans:

With the attention of Canadians now focused on the Dion Carbon Tax, it is understandable that people could be fooled into believing that this proposed GST hike might be off the table.

A Dion slip-up over the weekend confirmed that this is not the case. During the course of a bizarre political speech to an Ontario crowd, Stéphane Dion blamed the Conservative Government’s GST cut for many of the region’s worries.

“Dion blames the infrastructure deficit on the GST cut made by the current Conservative government because it increased other taxes, like property tax. (saying) ‘The only way to benefit from GST cut is to spend.’”

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No surprise here. Dion has made tens of billions of dollars in non-budgeted spending promises to special interest groups. Of course he needs money to pay for all that. So don't expect him to keep the taxes low.

Dion claims that his tax hikes are going to be "revenue neutral". We've seen that it won't be the case with carbon tax, that will come with a hefty $6B price tag, let alone - it would drive up the costs of goods as production and delivery become more expensive.

Reversing the GST cut will give Dion's government about $11B more per year. Of course it will drive the costs of goods and services even further up. But why would Dion care when he's got influential lobby groups waiting for what was promised to them?