Of course you’re right - my 7% is the BC example for PST. Our fabulous hotel room tax seems to be a separate entity from PST and is called HRT. It is 8%. I don’t know what will happen when we go to the HST
Oh my God! Them Frost-backs are coming down here and they’re going to try to burn Washington again! And, then they’re going to enslave us all with Universal Healthcare! Quick somebody tell Glenn Beck!
I just have thing to say to youse guys: Try to do a better job this time around. The last time you burned Washington, they simply rebuilt it.
Hijack - nitpick.
If the Canadians burned Washington D.C. then we sure kicked some Canadian ass at the battle of NEw Orleans!
We only count the wins.
I know, I know; that’s why it was a nitpick. 
I think that by agreeing to an HST, a province gives up the right to apply the provincial sales tax to different things that the GST is: the harmonized PST must be applied to the same things and only the same things as the GST. But does this mean that the rate of the harmonized PST must be the same everywhere it’s bundled into an HST? In other words, if Ontario and BC go for HSTs, will we still pay 7% + 5% in BC and 8% + 5% in Ontario?
The provinces keep that flexibility, subject to complying with notice provisions to the federal government about changes to the rate.
For example, in the recent Federal-Ontario Memorandum of Understanding, which commits both parties to seek to implement a harmonised tax, Ontario agrees that the new Ontario VAT would stay at the proposed rate of 8% for two years, and thereafter Ontario could change it:
Note that that Province cannot sign away its right to set its taxes at whatever rate it wishes - the Constitution gives the Provinces that power, and they cannot abandon it simply by an agreement, or even by passing legislation. However, they can sign an agreement with the feds in which they undertake to use a given rate for a set period, in return for the feds collecting the tax for them.
Interesting that it’s explicitly referred to as an Ontario value-added tax there, which implies that it will be collected everywhere the GST is. My impression was that the provincial component of the HST was a sales tax at the final sale only. Guess I was wrong; an OVAT would certainly be easierr to collect.
There wouldn’t be much policy reason for the feds to collect a provincial sales tax, without it being a VAT, just like the GST. They’re not interested just in harmonizing the tax base, but also the structure of the tax.
The idea of the HST is not just that the taxable items are the same, but that the sales taxes as currently structured distort the market and build taxes into the cost of goods. It’s argued that a VAT does not do this, that it doesn’t distort market prices as much and keeps the prices of goods more competitive. That was one of the arguments for the GST in the first place - it replaced a hidden federal manufacturing excise tax with a VAT tax. So the feds favour VAT taxes as a general economic policy, and are encouraging harmonization to achieve that policy.
I don’t know enough about the economics of taxation to say if the idea is sound, but that was the rationale. So I can’t see the feds being interested in the provinces just harmonizing the tax base; harmonization also includes the VAT concept.
Provincial sales taxes now do operate much like the old hidden federal manufacturing tax, since manufacturers pay the provincial tax on materials they buy to incorporate into their product. They naturally build the cost of the tax into the price of the product that the consumer pays, and then the consumer pays tax on that hidden tax. So not only does it drive the price up, there’s double-taxation. At least, that’s the argument. Again, I don’t know enough about the economics of taxation to say whether it’s so serious a problem as to justify switching to an HST.