Politically Charged: HST on the way
The Harmonized Sales Tax will be a part of Ontario receipts come Canada Day 2010. It merges the current federal GST and provincial sales taxes together. The HST will be increasing the price of most goods and services by eight per cent.
Many members of provincial parliament and members of parliament don't feel this is the right time to implement the tax, given the current economic climate. Gerry McCartney, CEO and general manager of the London Chamber of Commerce, would argue there's never a good time to bring in a new tax because people don't really like change. Politicians noted that those who rely on fuels to heat their homes and gas to travel to work will be unfairly asked to pay more. The main concern is essentially that people may not be able to afford this tax.
Yet McCartney seems to be a fan of it. He noted that the Canadian Chamber of Commerce meeting in Victoria had all 290 members vote in favour of a single tax system. McCartney says the tax isn't without its flaws, looking at examples from around the world where a single tax is implemented, but prices for consumers inevitably go down.
This may be attributed to the “cutting of red tape” for businesses in filing their taxes. The Ontario government claims that businesses will save $500-million dollars in reduced paper work and filing of the current two separate taxes — PST and GST. These business savings are in turn expected to be passed onto the consumer in prices of goods and services. Furthermore, the added money collected by the province is supposed to be put back into Ontario communities for education, health care and other services. This is how it's supposed to work — whether it will work that way remains to be seen until its implementation.
This is what you can expect to be paying more on come summer 2010: gas, heating fuels, electricity, tobacco, haircuts, gym membership fees, and taxi fares. These once PST-exempt goods and services have a lot of people, including Native communities, angry.
Looking at what will remain exempt from the HST may have some people breathing a little easier: basic groceries, prescription drugs, municipal public transit, most financial services, child care and music lessons.
The HST may have its downsides but in the end, it just may help Ontarians in the long run. Either way you look at it, Ontario Premier Dalton McGuinty will need to make the HST turn into a plus in the minds of Ontarians if he wants to keep power as the provincial government. If the HST doesn't work out for the province, voters may be marking more ballots for the NDP and Progressive Conservatives than for the provincial Grits.