TAX NEWS - June 2010

Ontario Tax: First Ontario HST rebates in the mail

Cheques meant to help defray cost of new harmonized sales tax

Cheques aimed at helping families cushion the blow of the Harmonized Sales Tax (HST) are on their way to more than 6.5 million Ontarians.

The cheques have been processed by Canada Revenue Agency on behalf of the provincial government and come from the $4.3 billion given to Ontario by the federal government in order to merge the GST and the provincial sales tax into the HST.

The federal government gave British Columbia $1.6 billion to adopt the HST, but B.C. used the money to lower the provincial deficit and introduce the HST at 12 per cent, one per cent lower than in Ontario.

The 13-per-cent HST will start being charged on July 1. Many items that were previously PST-exempt, such as gasoline and electricity, have an additional eight per cent in tax applied against them.

Three cheques will be mailed to Ontarians to help defray the added costs. The next one will come in December and the last in June 2011.

Families making less than $160,000 in combined income can expect to see rebates totalling $1,000. Singles earning less than $80,000 will get a total of $300.

The cheques that are now being mailed will be dated June 10. Eligible families will soon receive cheques totalling $330; the cheques in December and June 2011 will be for $335 each. Eligible singles will get a first cheque for $100.

In the case of a family, the cheque will be sent to the person who had their tax return assessed by the CRA first.

Ontarians who have chosen to receive tax rebates and other government payments through direct deposit will have the amount automatically deposited into their bank accounts. According to the CRA, more than 40 per cent of Ontarians are set up for direct deposit.

Ontario Progressive Conservative leader Tim Hudak has called the cheques a bribe using taxpayers' money.

Premier Dalton McGuinty has defended the cheques and the tax, saying the HST is necessary to secure jobs and investment in Ontario. He has said the cheques will help consumers cushion the blow they will face during the first year of the HST's rollout.