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I’m posting this both here and on my political blog. Obvious reasons.

For some time I’ve warned that a consequence of today’s political actions will be higher taxes. For 16 million Canadians, this starts in eight months.

Governments unable to contain their spending are about to lower a $6.9 billion annual tax boom on families. To do this when a million and a half people are out of work, in a recession, and just as mortgage rates start climbing, is a recipe for disaster.

Oh, not for business. And not for government. Both will clean up.

But for average Canadians the move to combine provincial sales taxes in Ontario and BC with the GST is an unbelievably ill-timed, cynical and mean-spirited move. Suddenly a slew of things that were not subject to tax, will be. The HST will be inflationary and punitive. It will also be inescapable. Unless you are a business operator, able to deduct it fully.

Over the weekend masses of people protested this federally-inspired tax grab in BC in 20 events. In Vancouver a thousand taxpayers gathered to tell the Gordon Campbell government to stuff its 12% levy – a far cry from Ontario where polls show most people have yet to clue in to the looming advent of a 13% sales tax to be imposed by the McGuinty administration.

The HST is a politician’s dream. Everything from grass seed to funerals, real estate commissions and clothing to legal and accounting fees will now be doubly taxed. The tax will be collected with every purchase, and added to general revenues. In exchange for agreeing to harmonize provincial levies with the GST, Ottawa is paying those two provinces extra billions. That Jim Flaherty guy sure knows how to spend your cash.

Hard hit will be real estate. Prices of new homes selling for more than $500,000 (basically every home in the Lower Mainland and most new digs in the GTA) will rise by about 6%. In Toronto, for example, this means to close on a $600,000 house a buyer will need $52,200 in cash just for taxes ($7,725 for Toronto land transfer tax, $8,475 for Ontario land tax and $36,000 for HST).

Sellers will pay HST on the entire commission. And the lawyer’s charge, the mover’s bill and the utility hook-ups. In fact the TD Bank estimates that although businesses can deduct the combo sales tax from their overhead, a big whack of tax will be passed on to consumers in the form of higher prices. So, figure on paying 1.5% more for everything.

Of course, coming out of a profitless recession, most businesses will be sorely tempted to top-up prices any way possible. What better chance than the wholesale addition of a 12% or 13% sales tax in these two key provinces?

So HST will add to the weekly cost of living, robbing families of cash flow, goosing the inflation rate while opening the door to inevitable price gouging. It is scheduled to take place (July 1) about exactly the time the Bank of Canada’s interest rate moratorium will end, bumping mortgage and loan costs. And most economists also believe energy costs will be on the rise throughout most of 2010 as global demand for oil starts to augment with a robust recovery in places like China – where annual car sales have just increased by 90%.

The perfect storm?

Hope not, but the potential’s clearly there for cascading events to knock Canadians back into a recessionary funk, with falling disposable incomes, downward pressure on home values and lots more KD on the menu.

But don’t blame Gordon Campbell or Dalton McGuinty. They’re merely the guys who got mugged. Both premiers are facing out-of-control deficits, thanks to national finances which have fallen off a cliff. As the Harper government jacked up its spending over the last three years, destroyed the pool of private savings in income trusts, foolishly chopped the GST instead of income taxes, increased the size and cost of government, failed to care about failing factories and talked up the dollar, we became sitting ducks for recession.

Sure, governments need cash. They’re plunging us into debt by the hour. Sure, businesses crave tax relief. The HST will give it.

But this is not the moment.

The country still belongs to the taxpayers and the voters. Not the taxing elites. Or does it?