By ARNOLD A. AUGUSTE, Publisher
Ontario Premier Dalton McGuinty is hell bent on harmonizing this province’s consumer taxes with that of the federal government’s – joining the 8% PST (Provincial Sales Tax) to the 5% GST (the federal Goods and Services Tax) for a total of 13% which will apply to just about everything we buy after July 1, 2010.
The premier insists that this tax is good for Ontario. He says it will be good for business. He says it will create much needed jobs. He also says it will be revenue-neutral. Now, that is a stretch. When has a government tax ever been revenue-neutral?
Most Ontarians seem to be upset judging from news reports and letters to the editors of the mainstream newspapers. But they may never have the chance to tell this to McGuinty since he has so far refused to hear their concerns in public meetings.
He did back down on adding the new HST (Harmonized Sales Tax) on such things as coffee and newspapers. The cost of your morning coffee at Tim Horton’s and the price of your morning newspaper will not go up by 8%, but just about everything else will.
(For those of you who don’t drink coffee or buy the daily newspapers, there is nothing for you. Some folks are still hoping McGuinty will compromise and include a wider range of products which are not now taxed.)
It is true that we currently pay two taxes – both the PST and the GST – on many of the goods and services we buy, so we are already paying the 13% on some things. What this tax will do, however, is add 8% to a much wider range of products and services on which we now only pay the 5% GST, such as home improvements. (Ontarians will soon have to pay 13% in taxes on such things as kitchen or bathroom renovations which could cost upwards of $15,000 instead of the 5% GST they now pay. Those who have taken advantage of the federal government’s home renovation tax credit, which expires soon, could count themselves lucky. They not only paid just 5% in taxes, they will also receive a rebate from the feds.)
One way businesses may benefit – especially those which do not now collect or remit the PST and so cannot claim their own PST costs as a deduction – may be if the allowable deduction is higher than the current 5%. Will the government allow businesses to claim the entire 13% or something substantial between the 5% and the 13%, or will we only be able to claim the 5%?
As for the break for newspapers, since newspapers such as Share are free, there will be no break for our readers (except for those who buy subscriptions). The tax break only applies to paid publications.
Advertisers don’t get a break either. They will have to cough up an additional 8% to pay for their advertising. Again, newspapers such as Share and other small community newspapers which are reluctant to raise their rates (we haven’t raised our rates in over seven years) will now have to charge our clients a whopping 8% more. Hopefully, they will be able to claim that – or most of it – back as a tax credit just as they do now with the GST, that is, if they are registered for the GST/HST.
It is also interesting that the province has chosen not to entertain the recommendation from some that the PST be reduced to make things a bit easier for consumers as the federal Conservatives have done with the GST. Maybe the feds will set a lower overall HST rate for the entire country.
The federal parliament has yet to vote on the new tax and the provinces cannot enact it until enabling legislation is in place.
The federal Liberals have already indicated they will support the government (provincial Liberal governments in both Ontario and British Columbia want to harmonize their taxes) and the Bloc Québécois is also in favour.
No one likes to pay taxes, but it is one of those necessary evils. Without the revenue from taxes our infrastructure will crumble. Most of us know and understand that. What we would like to see is a little empathy from our elected representatives.
All we hear from our premier is that this is good for Ontario.
Tell us how we will benefit both as a province and as individual Ontarians.
At least, tell us why harmonization is necessary.