The HST Blog : Canada Harmonized Sales Tax Lawyer Cyndee Todgham Cherniak for Assessments, PST & RST Issues in Ontario, British Columbia & Quebec

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On February 20, 1991, then Finance Minister Michael Wilson announced in Department of Finance press release 91-023 that the Federal Government of Canada and the Government of Saskatchewan had signed a Memorandum of Understanding which provides for the harmonization of the provincial sales tax with the very new goods and services tax ("HST").  I have a copy of this press release from Carswell's Canada GST Service (pages R687-694 in the "Historical" binder), but have not received permission yet to attach the photocopy.  The harmonization was to occur on January 1, 1992; but never did.

At the time of the press release in 1991, Grant Devine was the premier of Saskatchewan.  A few months later he had been voted out of office and Roy Romanow was the premier of Saskatchewan. During the election campaign, the proposed tax harmonization was a hot topic and public opposition was fierce.  Due to the public opposition to the sales tax harmonization plan, Premier Roy Romanow scrapped the sales tax harmonization plans and to this day Saskatchewan does not have an HST.  Harmonization legislation was not drafted (or should I say completed and released publicly) by the federal Department of Finance until 1997 when Nova Scotia, New Brunswick and Newfoundland/Labrador decided to implement the HST.

Former Premier Grant Devine became the Premier of Saskatchewan in the 1982 after his Progressive Conservative Party won the most seats (55 of 64 seats) in the provincial election.  His government was re-elected in 1986.  During the 1991 election, the Progressive Conservatives won only 10 of 66 seats and both the Devine PC government and the HST were history.  In 2004, Grant Devine sought to enter the federal political arena as a candidate, but was not accepted by the federal PC Party. 

In 1991, the New Democratic party won the election in Saskatchewan.  Roy Romanow became premier and held that position through two elections (1991-2001). Former Premier Lorne Calvert replaced Roy Romanow as NDP leader and premier of Saskatchewan (2001-2007).  Calvert and his government were defeated in 2007 by the Saskatchewan Party and Brad Wall became premier (2007 to present).  The Saskatchewan Party is a coalition of members of the Saskatchewan PC and Liberal parties, but is not the result of a merger.  Technically, the Saskatchewan PC party still exists, but is dormant so to speak.  It can, therefore, be said that the PC party in Saskatchewan did not recover after the failed HST attempt.

Back to the February 20, 1991 Department of Finance press release - Michael Wilson's press release and the backgrounder included statements about how the harmonized sales tax would be better for businesses.  It included statements about how single tax administration would result in economic efficiency and cost savings to businesses.  The people of Saskatchewan did not accept these statements as evidenced by the thrashing the initiators of the HST experienced (both federal and provincial PC parties) during the post announcement elections.

If one considers the Saskatchewan experience and then looks at the anti-HST movement in British Columbia, one should be able to see more clearly how the people can have a strong voice.