The votes are in. Ontario's Liberal government passed legislation to create a single 13 per cent Harmonized Sales Tax (HST) beginning July 1, 2010. The final vote came after weeks of staunch opposition in the Ontario legislature. However, as NDP leader Andrea Horwath stated, the Liberal majority was able to "ram through the HST bill…with little debate as possible."
The Liberals are enthusiastic about the HST. In a province still reeling from massive unemployment due to the current recession, the government estimates that the new tax will help create 600,000 new jobs over the next decade. Blending the PST and the GST will lower costs for businesses. This, in turn, will allow businesses to lower prices for consumers and hire more staff.
The opposition parties are adamant that the public, if asked, would strongly oppose the new HST and, thus, the Liberals did not take the tax issue to the polls. The opposition feels that the tax bill was railroaded as a way to increase tax revenues for the province. While many businesses will, indeed, benefit from the new tax, consumers will ultimately pay more from their pockets. Current PST exempt items including gasoline, home heating fuel, and cable TV will now be taxed under the new HST.
The new tax legislation is not without compensation. January 1, 2010 will see the implementation of tax cuts to both corporate and income taxes. Furthermore, some families will be entitled to a one-time rebate of up to $1,000 to offset the tax impact.
Ontario is not the only province to implement the HST. New Brunswick, Quebec, Nova Scotia, Newfoundland and Labrador have already done so. British Columbia has passed legislation to implement the HST next year as well.
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No one believes that Ontario will emerge from this recession the same as it went in. We need to become more competitive.
ReplyDeleteThe Canadian Centre for Policy Alternatives issued a report looking at low-income, middleclass and wealthy families and found that the HST is going to be revenue neutral.
A report by TD Bank estimates the HST will reduce cost of doing business in Ontario by roughly $5.3 billion and that the majority of these savings will be passed on to customers within the first year. In fact, the majority of items you purchase - 80 percent – will see no tax change at all.
A recent report by economist Jack Mintz confirms that Ontario needs to reform its tax system to create jobs and put Ontario back on its feet. It says, as a result of the HST, within 10 years Ontario would see:
o An estimated 591,000 additional new jobs
o Increased capital investment of $47 billion
o Increased overall annual worker incomes of up to 8.8 per cent, or $29.4billion
We have a choice: we can refuse to fix what’s broken, resign ourselves to the idea that Ontario will be less competitive or we can move forward and get the jobs Ontario needs.
Please visit: http://sites.google.com/site/thetruthaboutthehst/