Hon. Pierre J. Dalphond: According to yesterday’s papers, the Parliamentary Budget Officer indicated that the GST/HST holiday could cost up to $2.7 billion. At a meeting of the Standing Senate Committee on National Finance, members were told the direct tax cost would be $1.5 billion for the federal government and possibly $1.2 billion to compensate the provinces that harmonized their sales tax.

Senator Gold, can you tell us whether any province has said that it will waive compensation? My understanding is that, of the $1.2 billion, nearly $1 billion would go to Ontario.

Hon. Marc Gold (Government Representative in the Senate): Thank you for the question.

First, as the minister said, discussions are under way with all of the provinces and, according to the information that I have, those discussions have been productive and are ongoing.

To answer your question, I was told that Ontario, Newfoundland and Labrador, and Prince Edward Island have already waived their right to compensation. As for the other provinces, discussions are still under way.

Senator Dalphond: I understand. Thank you for that answer.

Does that mean that the direct tax cost would be $1.5 billion and there will be no compensation for the HST? Did I understand that correctly?

Senator Gold: As you know, we learned more about this in committee. There are agreements between Canada and the provinces, and under those agreements, there is a right to compensation, if revenue losses reach a certain level. For the moment, what I told you is accurate. You are correct, and the other discussions are ongoing.