In a section called Hand the GST to the provinces, the business group notes that a Quebec commission called for a similar solution in 2002. This approach, it says, “has several important virtues.”
The $29-billion raised annually by the GST is roughly equivalent to the amount of health and social transfers Ottawa doles out to provinces, the group notes.
But its proposal to cut the tax and health transfers almost certainly will unleash concern about the threat to Ottawa's ability to maintain national standards in areas of provincial jurisdiction, including health and social programs.
Shifting tax room to the provinces in this manner would “encourage the federal government to focus on its core responsibilities instead of continuously looking for ways to intrude in provincial jurisdiction,” the CEOs say.
Very, very interesting.