McGuinty must fess up on HST
A Harmonized Sales Tax means paying 8% more on a huge range of goods and services come July 1
By LORRIE GOLDSTEIN, TORONTO SUN
Last Updated: 1st November 2009, 4:05am
I shouldn't have to write this column. It's Premier Dalton McGuinty's job to inform us of the huge implications for our personal budgets resulting from his decision to impose a 13% Harmonized Sales Tax (HST) on us starting July 1.
Saying things like, "for about 80% of the things we buy, there will be no changes," as Revenue Minister John Wilkinson did last week, is useless and borders on misleading.
The McGuinty Liberals seem to be hoping people will sleepwalk into harmonization thinking of it mainly as a government bookkeeping item -- that bills that used to list the 5% federal GST and 8% Provincial Sales Tax (PST) separately, will now be combined to read 13%.
In fact, as the Canadian Taxpayers Federation (taxpayer.com) notes, harmonization means an enormous expansion of the 8% PST to match the much larger reach of the GST.
The National Citizens Coalition (nationalcitizens.ca) has an "HST Calculator" to give you some idea of the costs.
But Queen's Park should explain this through a dedicated website, listing everything the 13% HST will apply to on which consumers now pay only the 5% GST.
Here's my partial list, compiled, ironically, with the assistance of staff from the ministries of finance and revenue, who were genuinely helpful.
That means McGuinty has the expertise to do this himself. Why isn't he?
Here we go.
- As of July 1, for the first time, you will pay, in addition to the 5% GST, 8% more for gasoline for your car and for propane, diesel fuel and natural gas.
- You will pay 8% more for electricity and 8% more to heat your home, whether you use natural gas or oil.
You will also pay 8% more for:
- Home renovations.
- Many home service calls, such as those by electricians, plumbers, carpenters and furnace repairmen, to fix "real property fixtures" as opposed to "tangible personal property," on which we already pay the PST. To give you an idea of the difference, built-in appliances or a furnace and central air conditioning system qualify as "real property fixtures" while free-standing appliances or a window-mounted air conditioner, do not. (The government says tax credits for contractors under the HST could lower the basic price of the service call because PST is often buried in the price we pay now.)
- Repairs to clear blocked water and sewage pipes, unless provided by the municipality or system operator.
- Home landscaping, lawn care, tree cutting and snow removal services.
- Purchases of new homes, with the tax applied to the portion of the selling price exceeding $400,000.
- Domestic air, rail and bus travel, subject to point of origin, destination and stopovers.
- Personal services by a hair stylist, barber, manicurist, dry cleaner, fitness trainer.
- Professional services by an accountant, lawyer, real estate agent, investment funds manager.
- Gym membership fees.
- Hockey, ballet, karate, trampoline and soccer lessons for kids, save for those provided by public service bodies to children under 14 and to under-privileged or disabled persons.
- Rink rental fees.
- Camping fees.
- Tickets for professional live theatre.
- Green fees.
- Funeral services.
- Internet access fees.
- Newspapers and magazines.
- Postage stamps.
- Courier fees.
- Cigarettes and other tobacco purchases .
- Nicotine replacement products, subject to the nature of the product and why it's being supplied
- Footwear costing $30 or less, subject to Ontario's point-of-sale rebate for children's shoes.
- Prepared foods costing $4 or less.
- Real Christmas trees and firewood.
- The 5% PST on hotel rooms will be raised to 8%.
Some businesses may absorb some costs, rather than pass them on to consumers.
The government claims most Ontarians will be net winners because it's providing $10.6 billion in tax relief to individuals and $4.5 billion to businesses over three years, plus business savings which will be passed on to the public.
You can believe that, or not.