Quebec, Canada Near Sales-Tax Harmonization Agreement, Canadian Press Says

Talks between Quebec and Canada on the melding of their sales taxes are advanced enough for the parties to reach agreement, the Canadian Press reported, citing Quebec Finance Minister Raymond Bachand’s spokeswoman.

The provincial minister approved a draft agreement and sent it to his federal counterpart, Jim Flaherty, for his consideration last month, according to the spokeswoman, Catherine Poulin.

The agreement would combine the provincial sales tax with the federal goods and services tax.

The federal government is to release its budget March 22, and opposition parties will have a chance March 25 to unseat the government and force an election.

Because the government has fewer than half the seats in the House of Commons, it needs members of at least one opposition party to vote against or abstain from a confidence vote if it is to avoid an election.

If Quebec and the federal government were to agree on sales-tax harmonization, the Bloc Quebecois party “would have a powerful incentive to support the budget,” Chantal Hebert, a Toronto Star political columnist, wrote March 14.

“Discussions are ongoing in good faith with the government of Quebec but some points still remain unresolved, and there’s a fair bit more work to do,” Chisholm Pothier, a spokesman for the federal finance ministry, said in an e-mail message to Bloomberg News.

To contact the reporter for this story: Matt Walcoff in Montreal at mwalcoff1@bloomberg.net;

To contact the editor responsible for this story: Theophile Mullen at tmullen11@bloomberg.net.

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