The dreaded h-word is being heard again in Saskatchewan, despite the best efforts of the provincial government to make it go away.

Yes, harmonization of the provincial sales tax with the goods and services tax is getting back on track, after being shunted onto a siding for years. This time, the province’s largest business lobby is stoking the debate on the harmonized sales tax, backed by a major think-tank, the accounting profession and other business groups.

But it was a slip of the tongue by Finance Minister Rod Gantefoer that reignited the long-simmering issue. Just days after releasing his third budget in March — a restraint-minded effort that pared 1.5% off government spending — Gantefoer was speaking to a business audience in Saskatoon.

There he let slip that harmonization was an issue that warranted “good and wholesome debate’’ in the province. He also conceded harmonization would benefit the business community, as it would eliminate the PST on business inputs.

Within hours of his words appearing on the Saskatoon StarPhoenix website, Gantefoer was in full damage-control mode. Later the same day, the cabinet office issued a press release, headlined “Finance Minister Says No to Harmonized Sales Tax.” In the release, Gantefoer stated unequivocally that he was not in favour of harmonization and apologized for not making himself clear on the government’s position on the issue.

But Gantefoer’s grovelling retraction seemed to satisfy no one. NDP Leader Dwain Lingenfelter immediately pounced on Gantefoer’s words, suggesting the Saskatchewan Party government was indeed contemplating harmonization, which he blasted as a “$400-million tax grab.’’

The following week, the Saskatchewan Chamber of Commerce, along with three accounting associations and the province’s realtors, announced it was commissioning a major study of the province’s tax system.

The study, which will be undertaken by the Canada West Foundation, will look at the entire system of taxation in the province, including corporate and personal income taxes, property tax and sales tax. The person leading the research is Jack Vicq, Saskatchewan director of the Canada West Foundation, a retired professor of accounting at the University of Saskatchewan and the architect of two major studies of the tax system in the past 10 years.

Based on Vicq’s recommendations, the previous provincial NDP government made major reforms to the personal and business tax system between 2000 and 2006.

In both reports, Vicq had recommended sales tax harmonization, although, as a former senior finance department official, he was well aware of the fiscal and political challenges that doing so posed to the government.

The former NDP government had adopted virtually all of Vicq’s recommendations, except harmonization. As a last-ditch but futile effort to win election in 2007, the NDP reduced the PST by two percentage points to 5%.

After winning office in November 2007, Premier Brad Wall and the Saskatchewan Party wanted nothing to do with harmonization, which was perceived as an expensive, vote-losing gift to the business community.

But the issue has refused to go away. With British Columbia and Ontario harmonizing their sales taxes, Saskatchewan, Manitoba and P.E.I. are the only provinces that have not harmonized their sales taxes with the GST. Alberta, of course, has no sales tax.

Even Vicq understands the government’s reluctance to embrace harmonization, which ostensibly shifts a large portion of the PST tax burden to consumers and increases taxation on formerly PST-exempt items, such as children’s clothing and restaurant meals.

But, as Vicq has noted, whether harmonization is seen as good, bad or indifferent, it’s “probably inevitable.’’

In other words, the harmonization train has left the station. Will the Saskatchewan Party government be on the train, or lying on the tracks in front of it?

IE