Harmonized Sales Tax

March 31st, 2009 by Potato

By now I’m sure everyone has heard about the Ontario government’s plans to harmonize the PST with the federal GST. I don’t particularly care for this move, for two very simple reasons. The first is that this is going to take away the provincial government’s ability to have incentives for specific areas through PST changes. For example, the Ontario government doesn’t charge tax on the bare necessities such as electricity, natural gas, diapers, or most food items. While most food and diapers will remain free of the new HST, it looks like home energy is going to be taxed, and the MERs of mutual funds might get hit too. An even better example would be the green transportation initiatives: the Ontario government rebates $2000 of the PST paid for a hybrid car (new or used) — will they still have that ability when it’s HST? At the same time, they also cancelled PST for bicycles last year, to encourage Ontarians to take up cycling — will they have that ability with a federally-managed HST?

The other reason is that Wayfare is currently a private contractor at her job, and so she has to remit GST to the government; this is basically a charge she eats out of her “salary”. We don’t know what’s going to happen when the HST comes around, but at the very least she’s going to have to renegotiate her contract with her employer/client.

2 Responses to “Harmonized Sales Tax”

  1. Ben Says:

    Yeah I’m super pissed off about this, especially since I read in the Star a few days ago that it was basically a done deal. It’s bullshit IMO. They’re helping out businesses and sticking us normal folks with the bill. If they can take the PST of bicycles arbitrarily then the should damn well be able to take if off whatever machinery or junk businesses need to buy for less and not screw us for the difference from books and food and tampons! It’s terrible and I don’t think it’s getting nearly the press it should be, and people aren’t nearly as enraged as they should be (because they don’t even know about it for the most part). The worst sign of all is that that douchey bastard Flaherty has been pushing for this, so you know it can’t be good for anyone other than his rich business-owning buddies!

  2. Potato Says:

    The stupid thing is that GST is this weird shell game where they charge it on everything but if it’s used for business then people get it back so that at the end of the day it only gets kept once along the chain, but has a bunch of silly bureaucracy along the way. PST was really only charged on finished products, but companies had to eat it if they paid PST on something. From the few business owners I talked to, the only thing they could think of that they paid PST on for their business were computers, printers, and paper. I don’t think the savings are going to be huge for business…