Goods and Services Tax (Canada) - Reactions

Reactions

A strong Liberal Party majority was elected under the leadership of Jean Chrétien in the 1993 election. The Progressive Conservative Party fared very poorly in that election, winning only two seats. Although the party recovered somewhat in subsequent elections, it remained the smallest party in the House of Commons until it disbanded itself permanently in 2004, and merged with the Canadian Alliance to form the Conservative Party of Canada.

During the election campaign, Chrétien promised to repeal the GST, which the Liberals had denounced so vociferously while they were the Official Opposition, and replace it with a different tax. Instead of repeal, the Chrétien government attempted to restructure the tax and merge it with the provincial sales taxes in each province. They intended to call it the "Blended Sales Tax", but opponents quickly came to derisively call this proposal the "B.S. Tax", and the name was changed to Harmonized Sales Tax before its introduction. However, only three Atlantic provinces (Nova Scotia, New Brunswick and Newfoundland and Labrador) agreed to go along with this plan, joined by British Columbia and Ontario, in 2010.

The decision not to abolish or replace the GST caused great controversy, both within the party and out. Liberal Member of Parliament (MP) John Nunziata voted against the Liberal government's first budget and was expelled from the party. Heritage Minister Sheila Copps, who had personally promised to oppose the tax, resigned and sought re-election. She was re-elected with ease in the subsequent by-election, however, as was the Liberal government in the 1997 election.