In a recent CBC Radio interview, P.E.I.'s Premier explained why more necessities to Islanders' lives were not being exempt from the harmonized sales tax (HST). He stated: "We do not have the wiggle room to do that."
In fact, the HST removes the wiggle room we already have. It does this by giving away provincial powers to control consumption taxes. The HST agreement with the federal government is almost impossible to reverse.
When the current premier's regime is long gone, whoever is left to build upon the ruins of P.E.I.'s economic future will no longer have this extremely powerful public policy instrument of adjusting a provincial sales tax. The provincial government cannot in the future offer sales tax exemptions on firewood or fire extinguishers, naturopaths or child safety seats. Nor can it ask for high taxes on yachts or caviar.
"Wiggle Room" indeed!