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Layton calls on Ottawa to eliminate federal sales-tax hike on heating

NDP Leader Jack Layton during Question Period on Sept. 23, 2010.

CHRIS WATTIE/Chris Wattie/Reuters

NDP Leader Jack Layton is pressing the Harper government to offer a tax break on spiraling home heating bills as fall temperatures drop.

Mr. Layton is calling on Prime Minister Stephen Harper to give Canadians a five percentage point sales tax break on the levies charged for home heating.

The Nova Scotia New Democrat government has already moved to offer a similar break to voters there.

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The federal NDP wants Ottawa to scrap the federal portion of sales taxes on home heating: The 5 percentage points levied by the Goods and Services Tax or the federal portion of the Harmonized Sales Tax applied in many provinces.

The NDP estimates it would cost Ottawa $700-million in foregone revenue.

Mr. Layton's proposal also twists the political knife, though, blaming the rise in home heating costs on the introduction of the HST in Ontario and B.C. The new tax combines the GST and provincial sales tax but also means a sales tax hike for consumers because it is charged on many products which didn't incur PST before.

The Harper government has played a little noticed but crucial role in the move to the HST in Ontario and B.C. It offered both provincials billions of dollars in subsidies to make the switch. The federal Conservatives favour the HST because it represents a tax break for business even as it imposes higher immediate costs on consumers.

"We're seeing home heating costs skyrocket in many parts of the country. Here in Ontario, home heating costs have risen 17 percent in six months, in large part because of Harper's HST," Mr. Layton said. "With winter fast approaching, New Democrats recognize that something has to be done, now."

Mr. Layton is also asking the Tories to re-introduce the home and ecoEnergy retrofit incentive program, so Canadians can make their homes more energy efficient and further reduce heating bills.

The Conservatives are showing no enthusiasm for the NDP proposal.

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A political staffer working for Tory Finance Minister Jim Flaherty said the NDP is not normally a champion of lower taxes.

"Since coming to office in 2006, we cut over 100 taxes - reducing taxes in every way government collects them - and have lowered the tax bill for the average family by nearly $3,000," Flaherty spokeswoman Annette Robertson said in an e-mailed statement.

"The NDP has voted against, and opposed, every tax cut we introduced, including cutting the GST to five per cent on every purchase Canadians make, including home heating."

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About the Author
Parliamentary reporter

Steven Chase has covered federal politics in Ottawa for The Globe since mid-2001, arriving there a few months before 9/11. He previously worked in the paper's Vancouver and Calgary bureaus. Prior to that, he reported on Alberta politics for the Calgary Herald and the Calgary Sun, and on national issues for Alberta Report. More

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