"We have heard various representations concerning the issue, particularly with respect to conventions and so on," Jim Flaherty said in the House of Commons.

"These are matters that are being taken into consideration in our deliberations in trying to encourage tourism in Canada."

The Tories announced the end of the tax rebate program in September, saying few tourists mailed in a form to collect a rebate on the sales tax they spent while in Canada

But tour operators and hoteliers have objected because they were able to take advantage of the rebate in setting prices for customers, for package tours and conventions. That means they will have to add 14 per cent onto their prices in Nova Scotia when funding for the program ends in the March 19 budget.

Liberal industry critic Scott Brison has asked the government about the rebate twice recently, pointing out the provincial government has said the change will hurt the province.

"The minister ought to read his mail from provincial ministers, who are united in their belief that the fact is that it is bad public policy to make Canada the only country in the OECD without a visitor rebate program," he said on Monday.

OECD is the acronym for the Organization for Economic Co-operation and Development.

Tourism Minister Len Goucher has written to Ottawa saying the rebate should be retained. Premier Rodney MacDonald, who initially said the cuts wouldn’t hurt Nova Scotia, recently told CBC-TV that, in fact, it would hurt tour operators in the province.

The federal Tories had used Mr. MacDonald’s earlier comments in support of their plan to cut the program.

The Tories appear to realize they have made a mistake cutting the program, Dale Palmeter, a spokesman for Mr. Brison, said Monday.

"They have no choice but to reconsider it because they are going to inflict major damage on the tourism industry in this country if they don’t reconsider it," he said. "I have the impression that they are coming to the conclusion that they made a mistake."

( smaher@herald.ca )