GST abbreviates Goods and Services Tax. It was enacted as a 7 per cent tax on all consumption of all goods and services, not including "basic needs" which is presently construed as including groceries and rent. Effective July 1, 2006 it was reduced to 6%.
In Europe such taxes are generally called VAT or Value-Added Tax and have been levied at quite high rates, up to 25%, in part to replace income taxes and corporate taxes (both quite difficult to enforce in the EU where international business and capital flight is the norm).
A highly visible tax, it has remained unpopular with many Canadians, especially since it is applied to the service economy and it has remained an active Alberta issue as that province has no other sales tax.
This is again one of the hot issues in Canadian politics. In 1991, the Mulroney government created the tax to replace the manufacturing sales tax, or federal excise tax. After the introduction of [[NAFTA]], Canada was forced to take this move so that the manufacturing sales tax did not act as a hidden export tariff, unfairly disadvantaging Canadian exporters. The GST has helped raise government revenue to overcome the deficit problems. Since then, both the Liberal and Conservatives parties have promised, while in opposition, to reduce or repeal the GST. None have done so once in power. It was a contributing factor to the biggest defeat of a federal governing party in Canadian history in the Canadian federal election, 1993: The Liberals had promised to remove it, and leave the North American Free Trade Agreement, but did neither. Further, the GST was credited with the Canadian federal budget surplus of recent years on which Paul Martin built his own reputation as a fiscal manager:
Fiscally, the GST has accounted for 15% to 17% of total federal tax revenues each year since 1999.
[+] additional content
Link to any related issues or subissues - just the links please, no commentary. See related issues for details.
[+] The GST is good fiscal policy.
[+] Reduce the GST by 2%
[+] Forget the GST cut credit card rates.
[+] Change GST to SGT (supervised goods tax)
List sources cited and external links.
GST - wikipedia article
Regressive Tax Example