Quebec's Finance Minister Raymond Bachand (L) speaks as he unveils his budget at the National Assembly in Quebec City March 30, 2010.Jacques Boissinot/Reuters
Ottawa and Quebec are closing in on a deal to compensate the province for harmonizing its sales tax a decade ago, The Canadian Press has learned.
An agreement that would potentially send billions to Quebec would make voting down the next federal budget extremely difficult for the Bloc Québecois, thus helping Stephen Harper's government stay afloat longer.
Finance Minister Jim Flaherty would only say that he had made good progress in talks with his Quebec counterpart, Raymond Bachand.
Chisholm Pothier, a spokesperson for Mr. Flaherty, denied a report that the talks are near completion, saying a deal is "not close."
Mr. Bachand's office also said talks are progressing, but said the minister wasn't ready to make an announcement yet.
Ottawa gave Ontario $4.3-billion and British Columbia $1.6-billion to help their transitions to a harmonized sales tax this year.
Quebec has demanded up to $2.6-billion in compensation for harmonizing its sales taxes in the 1990s.
But Ottawa has argued that the taxes were never fully harmonized, with Quebec operating an independent tax system.
A deal would see Ottawa collect the taxes and send Quebec back its share.
With a report from Globe staff