A consequence of today’s actions are tomorrow’s taxes.

As night follows day, troubles trail deficits. There’s simply no escape, and this time the consequences will be as profound as they were in 1991. As that year dawned, the country got a new sales tax – a value-added thing called the GST, which would go on to raise more than $40 billion a year.

Canadians hated it, and in the next election destroyed the government responsible.

But the GST was inevitable, following years of record budget deficits which wildly inflated the national debt, crashed the dollar and gave us crushing interest rates. It took years of the money-sucking tax to balance the books and actually reverse the tide of debt.

Until now.

Since 2005 Ottawa has increased program spending at twice the rate of inflation. Even before the wheels came off the economy last fall, federal spending had hit the highest point ever, under Stephen Harper. Despite pledging in the last election he would not allow an annual deficit, it’s now going to be at least $50 billion (a record), and will take years to reduce.

The Parliamentary budget officer estimates at least $200 billion will be added to the national debt. That debt is financed mostly by bonds. When the government is forced to flood the marketplace with new bond issues, it competes for capital, and forces mortgage rates up. That interest on $600 billion debt is tax money, transferred from your income to the pocket of investors. It doesn’t buy a single new MRI machine, fund a school or fill a senior’s prescription.

But so much for economics.

I have a small taste for you of what’s coming, since governments are now incapable of living within their means. It’s the son of GST.

Starting in just over 10 months, seventeen million Canadians will wake up to a new tax on everything. Called the HST (for Harmonized Sales Tax), it will force everyone in Ontario and BC to double the sales tax paid on a range of things to which GST only now applies.

The two provincial governments are doing this because (a) they are being bought off by the feds, (b) it will raise a honking new mess of money, (c) it’s the kind of tax politicians love, since it’s automatic and universal and (d) business groups have been lobbying for it, since they get to write off all the tax that consumers are stuck with.

Here’s what the HST will do for housing in Ontario.

• It will add a tax of 8% on to the existing 5% GST on every service required to buy or sell a home. Like the commission, for example. On a $450,000 house, that amounts on average to $22,500. The HST will add $1,800. By the time HST is added to the legal fees, the appraisal and moving charges, the average house will be about $2,000 more costly.

But that’s nothing compared to the impact on new homes.

• The HST will apply to all new homes in every price range, with a maximum rebate of $24,000. That means a $400,000 house (Toronto average) will have 8% more stuck on it, or $8,000 after the rebate. A $750,000 house will have $36,000 in addition tax – plus the HST on commissions, closing costs and moving.

But it gets worse.

• The rebate is only for principal residences, which means every new cottage, chalet, recreational property, cabin or hobby farm will attract the entire withering 8% tax. That means to buy a $300,000 cottage in the Kawarthas (modest digs) could cost the purchaser $24,000 more.

And the worst: this tax will come into effect just about the time the Bank of Canada says it will lift its current freeze on interest rates. That should be an interesting one-two punch – rising mortgage rates and romping taxes.

In case you were in the john, here’s the main point: Spending, deficits and debts have consequences. Taxes and interest rates are going up, not down.

Look into the eyes of the HST. It’s the future winking back.

For Garth's latest podcast, go here.