Canadian Election and HST deal with Quebec

The one caveat- when discussing the prospects of an election- is this potential HST deal for Quebec, which could well win Bloc support. My opinion is this HST angle is the only real scenario that can prevent a spring election. The Liberals are taking a firm stand. The NDP seem an unlikely partner, even though we have evidence of some minimal government outreach. The Bloc are really the only option for the government, so it comes as NO surprise that we now see this HST issue come to the fore, talk of "progress". It is also not shocking that Duceppe has suddenly made the HST issue the main consideration in supporting the budget:

Bloc Quebecois Leader Gilles Duceppe says his party will vote against the next federal budget if it doesn’t include $2 billion in compensation for Quebec for harmonizing the GST and the provincial sales tax.

A spring election could be triggered if a majority of Parliament’s 308 MPs vote against the budget.

Quebec harmonized its sales tax in 1992 but has not seen any compensation from the federal government, unlike Ontario and British Columbia which recently implemented the measure.

Duceppe says negotiations with Quebec have stalled but sources have been saying for several weeks that federal and provincial negotiators are on the verge of a deal.

Duceppe tells The Canadian Press he is not guaranteeing Bloc support of the budget even if the compensation is included.

He will evaluate the budget as a whole and see if it benefits Quebecers.

The timing is a bit cute. Just as we hear a deal may be within reach, Duceppe suddenly issues "demands" on that very topic. It’s a well played political tactic, find something that is already on the table, adopt it as demand, so when it comes to fruition you look like you’ve extracted. The NDP in the fall of 2009 serves as the template, creating the optics of concession where none really existed. The Bloc has purposely made the HST an almost make or break consideration, because they sense the government is likely to acquiesce.

In the coming weeks, we will see just how badly the government wants to avoid an election. If they fast track an HST deal with Quebec, and come close to the dollar figure, then it appears the Bloc can support the budget. Duceppe is no fool, even though he’s left voting against the budget on the table regardless, really he is being quite transparent here. Get this HST deal done to satisfaction, and you will avoid a spring election. I believe this government wants no part of an election, so I suspect we will see a union develop over the coming weeks. The polls show little upside, best case status quo, worst case a loss of power in some configuration.

If people don’t want an election, we now see the path to passage. Both parties are signalling their desire to find a commonality on this front, the dance has clearly begun… 

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