Canada Tories try to put tax firestorm behind them

* Bill would force opposition to put up or shut up

* Parliament would be asked to pronounce on harmonized tax

* Gov't says failure of measure wouldn't force election

By Randall Palmer

OTTAWA, Nov 26 (Reuters) - Canada's Conservative government intends to introduce legislation next week it hopes will tamp down controversy over an unpopular sales tax.

A government document obtained by Reuters on Thursday revealed that the Conservatives intended to put the official opposition Liberal Party on the spot over proposals to let provinces merge their sales taxes with the federal tax into a harmonized value-added tax.

Parliament would be asked to confirm the right of provinces to choose such a tax, and if the Liberals say no, the issue would not be revisited -- with the implication that the firestorm it has created would die.

"This legislation will have the support of the official opposition or it will not," the document said.

"If it does, we expect the bill to win approval before the Christmas recess. If the framework legislation is rejected before Christmas, we will not revisit the issue. Not next year. Not after the next election."

Of course, if the Liberals did back it, then they could also face any voter recrimination.

Economists say a shift from a straight sales tax to a value-added tax is more efficient and would help the economy overall.

Consumer groups and some provincial and federal opposition parties have complained, however, that the burden would be shared unequally. Businesses would benefit but consumers would be asked to pay new taxes on everything from home heating to diapers and coffins.

The government points out that the previous Liberal government already allowed some provinces to harmonize their taxes and says all provinces should be treated equally. Ontario and British Columbia have decided to implement the harmonized tax, but they need the federal legislative change.

Crucially, the government said the legislation would not be a confidence measure that could trigger an election if it fails. This is because it deals only with the right of provinces to have the harmonized tax and does not deal with any compensation that might be arranged with the provinces.

The consequence in theory would be that the issue either goes ahead quickly or it dies. ((Editing by Stacey Joyce; randall.palmer@thomsonreuters.com; +1-613-235-6745; Reuters Messaging: randall.palmer.reuters.com@reuters.net))