Harmonizing the GST and PST

[Topaz]

Since I can't watch the Ontario gov't on TV thanks to Starchoice, I heard on a radio program that McGuinty is thinking of harmonizing the GST and PST and from what I'm hearing from a radio program, viewers they are totally against. The Host found that we would be paying more tax when buying. A rep. from the Ontario Housing Ass. said for a $200,000, new home would be 209,000 and in Toronto is would be nearly extra 46,000 for a new home. So it seems again it would be the Feds and the Ontario that would come out ahead and at a time when we need more money in the hands of Canadians and not governments!! How would this work for items that aren't taxed on the GST or provincial??

[Molly]

The only place anyone would seriously notice it would be on large-ticket items, and if it is a problem, that's easy enough to offset or rebate at income tax time.

I think it's fairly foolish not to have them harmonized and handled by a single beaurocracy. It's so much more cost-effective.

[capricorn]

There might be some merit in harmonizing the GST and PST in Ontario, but not now. Not in this economic climate.

Premier Dalton McGuinty has floated the idea, saying a single tax of 13 per cent would meet the needs of business owners, who find it costly and time-consuming to do double the paperwork.

But it would put a heavy burden on consumers, who would suddenly see the eight per cent PST added to all kinds of essential items that are currently exempt.

It would be unfair to slap that tax on basic footwear, diapers, feminine hygiene products and heating fuel -- hardly luxury items for most families. And for those who plan to purchase a new house, the PST would now be added, increasing the cost of home ownership significantly. It's estimated the price would jump an average of $9,000 in Windsor and almost $50,000 in Toronto.

Already reeling from the downturn in the housing market, the Ontario Home Builders Association is against any move that would introduce a combined tax in the March 26 provincial budget.

http://www2.canada.com/windsorstar/news/ed...19-9194b3cf23fa

I ask myself, is Dalton's intent really to reduce the paperwork for small business or is it that Dalton sees an opportunity to collect extra cash to help with the province's deficit? I hope his government excludes those essential items that are presently exempt from provincial tax. It may not seem like a lot of money to some but for low income families it makes a difference.

[Chuck U. Farlie]

Sounds more and more like McGuinty is going to harmonize the taxes.

For most things, it won't effect me.

It definitely would for a new house.

The other place is used cars... now you only pay PST if you buy a used car privately. That will change.

You will also pay more for heating oil.

Supposedly when the Atlantic provinces harmonized, the taxes they paid on gasoline and heating oil doubled, but don't we already pay both gst and pst on gasoline?

[M.Dancer]

This is McGuinty's plan for fixing the falling price of homes in Ontario....add 5K in taxes.

[Wild Bill]

http://www2.canada.com/windsorstar/news/ed...19-9194b3cf23fa

I ask myself, is Dalton's intent really to reduce the paperwork for small business or is it that Dalton sees an opportunity to collect extra cash to help with the province's deficit? I hope his government excludes those essential items that are presently exempt from provincial tax. It may not seem like a lot of money to some but for low income families it makes a difference.

It would be inconsistent to expect that a politician would make such a change solely for the benefit of business, small or otherwise. It is an obvious large benefit to McGuinty! First off, he will no longer need nearly as large a collection/administration department. The feds will collect the whole schmozzle and just send him a cheque. So he will be able to downsize staff, at least as much as is allowed in the public sector.

What's more, there are many things that right now are exempt from provincial sales tax. NO MORE! It is considered too complicated to exempt some items from a part of the Harmonized Sales Tax. We will be paying HST on everything that formerly was exempt from just the GST or just the PST. Both the Feds and Ontario will grab some more money.

THAT'S WHY HE'S DOING IT! HE NEEDS THE MONEY!

It's true that it will be simpler for most business to pay to one tax collector. Except for very small one-man outfits like myself. Until now the limit for having to pay GST was $35,000. Below that in sales you don't have to bother. Now you will immediately have to add the GST portion to the taxes on any invoice. So the little guy will become more expensive.

Anyhow, I predict that this will prove to be a political mistake. It doesn't matter that it's more efficient and benefits business. Businesses themselves don't vote and there are far fewer votes from business owners than others. Most citizens will immediately notice a new tax grab, similar to when Mulroney brought in the GST. The GST made sense in a lot of ways as well but it was the most hated new tax ever introduced in Canada and was largely responsible for creating a huge underground economy.

If these were flush times Dalton likely would get away with it but that's not the case. People in Ontario are hurting. Even a little bit of extra pain from their provincial government is likely to be deeply resented. I'm truly not sure if Dalton and his people understand that. They have been very blase about much public reaction during their stay in office, seemingly unaware of how great a benefit they have enjoyed from having such an inept opposition. They probably think there will be a small bit of grumbling that will die out long before the next election, which after all is two years away.

They may be right. It should be interesting to watch and see.

[Riverwind]

I ask myself, is Dalton's intent really to reduce the paperwork for small business or is it that Dalton sees an opportunity to collect extra cash to help with the province's deficit?

As a small business owner I would happily pay a bit more in tax if it meant I could get rid of the extra paper work. Red tape is not free. Money collected in taxes instead of paying for red tape would be available for program spending or tax reductions elsewhere.

[capricorn]

If these were flush times Dalton likely would get away with it but that's not the case. People in Ontario are hurting. Even a little bit of extra pain from their provincial government is likely to be deeply resented. I'm truly not sure if Dalton and his people understand that. They have been very blase about much public reaction during their stay in office, seemingly unaware of how great a benefit they have enjoyed from having such an inept opposition. They probably think there will be a small bit of grumbling that will die out long before the next election, which after all is two years away.

Well, Wild Bill, it looks like Dalton has found the sugar coating to make the medicine go down. It is reported that the HST will be announced in tomorrow's budget. The sugar coating for paying PST on all those previously exempted consumables is that every family earning under $160,000 p.a. will received $1,000, payable in 3 installments over the next 12 months. Don't you just love being bribed with your own money?

CTV Toronto has learned the Ontario government will blend the provincial sales tax with the federal GST in Thursday's budget, but will provide help to a wide swath of the province's families.

The Liberal government of Premier Dalton McGuinty will mail out cheques totalling up to $1,000 to families making less than $160,000 per year, CTV Toronto's Paul Bliss reported Wednesday.

About three cheques will be issued over a 12-month period to compensate for the expanded range of the tax.

The move -- without adjustments -- would extend the province's tax take to new homes, children's clothing, heating fuel, books, fast food meals under $4 and feminine hygiene products.

Sources say that the government may offer some exemptions from the harmonized tax, including new homes.

http://toronto.ctv.ca/servlet/an/local/CTV...325?hub=Toronto

He poo-pooed the opposition's concerns to extending a tax to previously exempted goods because he thinks the ace up his sleeve will void all objections.

"Premier, you already have the folks in this province by the throat," said interim Opposition Leader Bob Runciman. "How much tighter are you going to squeeze them?"

The Speaker forced him to withdraw that remark.

NDP Leader Andrea Horwath picked up that line of attack.

"That's eight per cent more to heat their homes, eight per cent more to dress their kids, eight per cent more for a hot dog on the corner," she said. "Why is the premier slapping an eight per cent sales tax on families at a time when they can least afford it?"

McGuinty appeared calm and confident, perhaps because knew about the soon-to-be-announced rebate plan.

"We will find ways to provide better supports to Ontario families," he said.

Just like he found a better way to fund health care by imposing a health tax premium on Ontarians. :angry:

[August1991]

As a small business owner I would happily pay a bit more in tax if it meant I could get rid of the extra paper work. Red tape is not free. Money collected in taxes instead of paying for red tape would be available for program spending or tax reductions elsewhere.

This is the main issue.

In PEI, NB, NS, Nfld and Quebec, the provincial sales tax is "harmonized" on the GST. In effect, there is one single tax assessed in the same manner and then the two levels of government take their cut. (In the case of Quebec, provincial bureaucrats collect all the money and then send a cheque to Ottawa for its share. Elsewhere, the feds do the collecting and send their shares to the provincial capitals.) Taxpayers face one tax collector.

In Manitoba, Ont, Sask and BC, the story is different. Two tax collectors show up and collect. Why? First, the GST was a hated tax (that only Mulroney had the courage to implement). Second, the GST is a sophisticated, intelligent, anti-politician tax that is comprehensive. Almost everything is covered and it is hard for politicians to use it to play favourites by granting exemptions to specific sectors.

I suspect that McGuinty realizes that teh savings in bureaucratic tax collecting costs outweigh the political cost now of the GST - particularly now that it's only 5%. I suspect that McGuinty is also looking at Charest who plans to raise the Quebec cut of the Quebec harmonized tax.

[DFCaper]

Sounds more and more like McGuinty is going to harmonize the taxes.

For most things, it won't effect me.

It definitely would for a new house.

The other place is used cars... now you only pay PST if you buy a used car privately. That will change.

You will also pay more for heating oil.

Supposedly when the Atlantic provinces harmonized, the taxes they paid on gasoline and heating oil doubled, but don't we already pay both gst and pst on gasoline?

PST in Nova Scotia was 10% prior to HST. They dropped it to 8% when the changed over to the HST. I'm sure the revenue from the HST was still larger than the PST provided.

Dalton is just looking for a HUGE tax grab. We need a new leader in this province. The good times are over, and so is Mcgumpy's ability to be effective....

[Chuck U. Farlie]

There are certain businesses that this will hurt particularly hard, that I hadn't thought of until it was mentioned on talk radio.

Trucking firms... small ones with offices only in Ontario... will now have to charge their customers 8% more with HST, making it much harder to compete with other provinces and states.

Construction companies... now have to charge 8% more (before it was just the GST).

And especially now, when companies are already struggling or failing, McGuinty is going to make it even harder on them?

This will be a boom for black market stuff though. My brother, the owner of a small construction company, can either decide to raise his rates 8% (which he will have to do with some customers), or he can offer to work for cash for even more customers.

Another knee-jerk not thought out plan by McGuinty... way to go.

[Molly]

Oh for heaven's sake! We whine on and on about efficiency in government, and reduction of beaurocracy... and then when someone actually does it, whine some more.

Frankly, the government is quite welcome to the money it collects from me on all the new houses , feminine hygiene products and childrens clothing I plan to buy over the next few years, so long as it is costing retailers and government less to collect it, and the savings are remitted right back to me... which is exactly what a harmonized, rebating system does.

I'm no fan of McGuinty- think he's a freaking joke, as a matter of fact- but even a blind dog finds a bone now and again.

[Chuck U. Farlie]

Oh for heaven's sake! We whine on and on about efficiency in government, and reduction of beaurocracy... and then when someone actually does it, whine some more.

Frankly, the government is quite welcome to the money it collects from me on all the new houses , feminine hygiene products and childrens clothing I plan to buy over the next few years, so long as it is costing retailers and government less to collect it, and the savings are remitted right back to me... which is exactly what a harmonized, rebating system does.

I'm no fan of McGuinty- think he's a freaking joke, as a matter of fact- but even a blind dog finds a bone now and again.

Efficiency?

They are harmonizing the taxes and then offering piles of exemptions and need to create a rebate system! How is that efficient? To me it sounds just as confusing as it works now!

[Average Joe]

Oh for heaven's sake! We whine on and on about efficiency in government, and reduction of beaurocracy... and then when someone actually does it, whine some more.

Frankly, the government is quite welcome to the money it collects from me on all the new houses , feminine hygiene products and childrens clothing I plan to buy over the next few years, so long as it is costing retailers and government less to collect it, and the savings are remitted right back to me... which is exactly what a harmonized, rebating system does.

I'm no fan of McGuinty- think he's a freaking joke, as a matter of fact- but even a blind dog finds a bone now and again.

Do you actually believe they are going to get rid of the deadwood, hell no they will just move them around to other departments. The public sector unions would scream bloody murder if they laid anyone off during these times, that only happens in the private sector . Do you really believe the retailers are going to help you out and lower the prices because of this, ya right, the stock holders will be happy I'm sure. Every little bit helps their bottom line. I hope you are right about government and retailers remitting the savings back to us but I wouldn't hold my breath. It's just another tax grab just like the health "Premium" that was to improve our health care.

[capricorn]

I looked at the details of the tax rebate in the budget. It's interesting that the last installment of the rebate will be paid in June 2011, three months before the next Ontario election.

Benefits would be delivered to eligible Ontario tax filers aged 18 and over in each of June 2010, December 2010 and June 2011. The McGuinty government would provide eligible families with an income of less than $160,000 with three payments totalling $1,000 to help them adjust to the new single sales tax. Eligible individuals who earn less than $80,000 would get three payments totalling $300.

http://www.fin.gov.on.ca/english/budget/on...009/bk_tax.html

(my emphasis)

Good (election) planning Dalton. I can picture him reminding voters that it was thanks to his government that Ontarians has a little extra cash for summer vacation. <chuckle>

[Average Joe]

I looked at the details of the tax rebate in the budget. It's interesting that the last installment of the rebate will be paid in June 2011, three months before the next Ontario election.

http://www.fin.gov.on.ca/english/budget/on...009/bk_tax.html

(my emphasis)

Good (election) planning Dalton. I can picture him reminding voters that it was thanks to his government that Ontarians has a little extra cash for summer vacation. <chuckle>

Come on you don't actually think they would be that sneeky do you? :lol:

Giving me back my own money for summer vacation sounds good to me. Hopefully we will all have jobs to take a summer vacations from.

[capricorn]

Come on you don't actually think they would be that sneeky do you? :lol:

Giving me back my own money for summer vacation sounds good to me. Hopefully we will all have jobs to take a summer vacations from.

Do you think maybe he's issuing the rebate in 3 installments instead of one lump sum is because he doesn't trust Ontarians with all that cash in their grubby little hands? Maybe we'd blow the whole lot on beer and popcorn.

[85RZ500]

If you want a good chuckle go to the Toronto Sun site and read the comments on the budget story. The people are livid, the Liebarrel ears are burning. I can just imagine the e-mails roaring into the Liberals sites, ouch.

Two things, this budget has to be voted on and I've heard that there will be yet another tax on gasoline. The vote should be interesting and another 30cents added to a gallon of gas is not what the economy needs.

[robert_viera]

Another government shifting the burden of taxes off businesses and on to the consumer. It's sad to see Dalton McGuinty taking Jim Flaherty's advice. I was watching the news last night and the story that aired just before the story about the GST/PST harmonization was about the safety of ski helmets. I recall replacing a bike helmet last year and was pleasantly surprised when I discovered that it was exempt from PST. I guess another downside of harmonization is that the province loses the ability to encourage people to buy certain things by making them PST exempt.

[85RZ500]

LOL, just noticed the start date, July 1,2010, o

I can imagine it will take some time to rearange the mechanics of it all but there will be a ton of flack in that time period.

This abomination can be manipulated, as to dropping off items that would be newly taxable.

Sort of like union bargaining, ask for 10%, accept 7 which is what you wanted in the first place.

MooooGuinty can let us stew for awhile then drop some items off the taxble list to make us love him once more.

Back to the gas thing, at todays prices thats an additional 31cents a gallon. Times what Ontarionans use in a month, that's a veritable tax windfall for the scumbags.

[capricorn]

Two things, this budget has to be voted on and I've heard that there will be yet another tax on gasoline. The vote should be interesting and another 30cents added to a gallon of gas is not what the economy needs.

The vote is immaterial given Dalton's majority. The debates on the budget now that's another thing.

[capricorn]

It's sad to see Dalton McGuinty taking Jim Flaherty's advice.

In fairness, previous governments, including Liberals, have also pushed provinces to adopt a HST on the premise that it improves Canada's competitiveness.

Five provinces still levy an independent RST: British Columbia, Manitoba,

Saskatchewan, Ontario and Prince Edward Island.

---

The federal government is urging the remaining RST provinces to

harmonize, en route to improving Canada’s tax competitiveness.

---

In 1996, to encourage the provinces to harmonize their tax base with the GST, the

federal government offered to compensate for some of the difference between (i)

what the provinces would have raised from their RSTs, had they kept rates the

same, and (ii) the actual revenues of a provincial HST at 8 percent.

Sales tax revenues fell in the provinces that harmonized their RST in April

of 1997 (see figures 1a, 1b and 1c). This was because these three provinces cut their

RST rates by approximately one-third. Nova Scotia and New Brunswick had

statutory RST rates of 11 percent while Newfoundland and Labrador had a

statutory rate of 12 percent. The provincial component of the HST is now 8 percent

(the federal component is now, of course, the 5 percent GST).

---

There will be substantial economic benefits from harmonizing the

remaining provincial sales taxes with the GST; namely, improving Canada’s tax

structure and strengthening Canada’s economic union.

http://74.125.95.132/search?q=cache:43a6MJ...lient=firefox-a

I guess another downside of harmonization is that the province loses the ability to encourage people to buy certain things by making them PST exempt.

Provinces will continue to promote the purchase of certain goods they deem "good for us". That won't change but those goods will just cost us more. But you're right that the enticement will be somewhat lost.

[mikedavid00]

In fairness, previous governments, including Liberals, have also pushed provinces to adopt a HST on the premise that it improves Canada's competitiveness.

http://74.125.95.132/search?q=cache:43a6MJ...lient=firefox-a

Provinces will continue to promote the purchase of certain goods they deem "good for us". That won't change but those goods will just cost us more. But you're right that the enticement will be somewhat lost.

The fact is, gas, heating, utility bills as well phone, internet, cable are all going up for you and me.

The fact is, housing prices will be going up for most families in 5 years.

The fact is, alchohol, tobacco, and many, many other products will be going up.

The fact is, more money will be out of our pocket each month.

The fact is, there will be more tax evation and underground economy.

The fact is, there will be more unionized gov't workers who have fat paychecks that we all have to pay for.

The fact is, the gov't is making more money and we're making less.

I don't know why people are having such trouble understanding what is going on.

[madmax]

MikeDavid00 is back and blowing a gasket, and this time, I am with you.

This is a dirty, sneaky, poor punishing budget, that sticks it to the lower and middle class. It makes me sick. Possibly just as damaging is the lack of response from the PCs who don't know if they are coming or going on the Harmonizing.

This is a big, big, big tax grab and they are taking from the poorest to feed the the government and the governments rich friends.

This is going to kill what is left of the Ontario Economy.

McGuinty and is Finance Minister Dwight Duncan are out to lunch fat cats.

Families are going to suffer, and those cheques aren't going to do squat, once people add up how much the government has pickpocketed from them.

Welfare for the Rich, Taxes for the Poor.

[Riverwind]

The fact is, more money will be out of our pocket each month.

The fact is manufacturers just got a 8% reduction in the cost of the stuff they buy to make their products.

The fact is this could make the difference between oblivion and profitability for many businesses.

The fact is market competition in a slow economy will mean businesses will pass on the cost savings to consumers.