Spreading like a rash

Diane Francis gets on the sales tax cut train:

3. The GST and PST should be eliminated immediately for purchases of cars that are fuel efficient. This would reduce consumer prices and help enhance demand for cars.

Great idea. Of course, we already have a rebate program for buyers of fuel-efficient vehicles, it being one of the very few initiatives on the environment the current government has bothered to implement. And the rebates on EcoAuto range from $1000-$2000, which, depending on the make of car you’re buying, eliminates the cost of the GST or most of the GST and PST. While the program is quite successful, there’s no evidence it’s enhancing demand for cars overall, so it’s of very limited use as a stimulus to the auto industry. In fact, year-over-year vehicle sales were down by double-digits in Canada in November, bargain pricing, rebate, and all.