TAX NEWS - June 2010

Canada Tax: HST rebates just part of our tax reforms

Re: I'm sending back HST rebate cheques, June 11.

Letter-writer Birte Ertmann writes that she is sending back her $100 HST transition rebate because it is taxable. I strongly encourage Ertmann to keep her cheque because it is in fact not subject to any taxes at all.

Over the next year, most families will receive three cheques totalling $1,000 in the mail, while most single people will receive three cheques totalling $300. This is in addition to a permanent income tax cut for 93 per cent of Ontarians and a permanent Ontario Sales Tax Credit of $260 for each adult and child in low- to middle- income families. There are other measures as well, including the new, permanent Ontario Senior Homeowners' Property Tax Grant.

The above tax cuts and credits are part of a tax reform package which includes merging the PST and GST. This will result in Ontario creating 600,000 new, good jobs over the next 10 years.

Economist Jack Mintz predicts that as a result of Ontario's tax package, we will attract $47 billion in new investment and increased annual incomes of up to 8.8 per cent within 10 years.

Moving to the HST reduces the cost to produce goods and services by removing hidden sales taxes for businesses. That's why economists say it will create jobs and remove $500 million in annual administrative costs for business.