TAX NEWS - JUNE 2010

Canada Tax: HST will tax everyone on just about everything

by Toby Barrett, 03 June 2010 -- Everywhere you look there are signs of the looming impact about to be wrought by the harmonized sales tax – the HST. Mr. McGuinty has recently admitted what the Canadian Taxpayers Federation, the Opposition and the hundreds of thousands who have signed petitions already knew; the harmonized sales tax (HST) will take money – a lot of money - from Ontario families.

After insisting for close to a year that the bait and switch of one-time transition cheques and businesses "passing along the (supposed) savings" would offset the 13 percent shot to the wallet, Mr. McGuinty has finally acknowledged, "I think for families at the outset there will be an increase in taxation." So much for "I won't raise your taxes."

Given the deluge of figures indicating what we will be paying to feed McGuinty's harmonized sales tax (HST), the Premier had little choice.

Here are some of the latest indications of what the tax will mean to Ontarians:

A report from the Canadian Taxpayer's Federation (CTF) estimates that when it comes to gasoline prices, families will be paying and average of $246 more every year just to fill up. Families in rural and northern areas are expected to pay even more.

The Canadian Taxpayer's Federation report also underlines the fact that the harmonized sales tax is a tax grab by any definition – "For the government [the HST] works out to a minimum of $1.6 billion in extra revenue with which to continue Ontario's unsustainable spending habits" (CTF – "Taxpayer Supply & Government Demand:12th Annual Gas Tax Honesty Report").

Meantime, reports indicate that McGuinty's HST will get us "dead or alive". As of Dominion Day, Ontarians will be forced to pay between $650 and $1,300 in taxes for funeral services. Some of the items that will be subject to the new eight per cent tax include lawyer fees to administer last will and testament, estate planning, floral arrangements, catering services and more.

All told, the long list of products and services the harmonized sales tax (HST) will impact – a tax for everyone on just about everything – has experts agreeing that average Ontarians will be paying dearly to meet the tax. The National Citizens Coalition has recently calculated it will cost an average of between $800 and $1,000 or more in additional sales taxes every year.

As these numbers begin to draw closer to reality, opposition to the tax continues to grow. An Ipsos Reid poll indicates more than 74 per cent of Ontarians oppose the harmonized sales tax (HST). Ninety per cent of respondents said they believe the harmonized sales tax (HST) is nothing more than a "huge tax grab by the provincial government."

Given that everyone is on to the government's worst-kept secret, the Ontario PC Opposition proposed a motion late last month to inject some sensibility into the proceedings:

"That, in light of Premier McGuinty telling Ontario families the harmonized sales tax (HST) will be revenue-neutral when he knew all along "there will be an increase in taxation" as a result of it; the Legislative Assembly of Ontario calls upon the McGuinty government to delay implementation of the harmonized sales tax (HST) until a date following the next provincial general election."

After learning about the PC motion, Dalton McGuinty betrayed an all-party agreement in order to kill the call for sober second thought before it could be debated and voted on in public.

July First is coming – buyer beware.