WhatFinger


Harmonized Sales Tax, Ontario, Premier Dalton McGuinty

HST means we all pay more



It is unconscionable that Premier Dalton McGuinty would impose the so-called Harmonized Sales Tax (HST) scheme on Ontarians right in the middle of a recession. The end result of this hare-brained plan will be that the Taxpayers of Ontario will all be paying a lot more every time they open their wallets and long after the recession ends everywhere else, it will still be dogging us here.

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While both the federal and provincial governments are shoveling buckets of cash into Ontario’s moribund automobile industry, the imposition of the HST is yet another nail in the coffin of the residential construction industry, which already hamstrung by a recessionary economy, will take a further hit as house prices will increase dramatically. The difference between buying a new home for $400,000 and $500,000 will be an additional $32,000 being sucked out of taxpayers’ pockets. But that isn’t all that’s going to be affected under HST in Ontario. Anyone who drives a car will be paying more every time the vehicle is refueled; as yet another layer of taxes is added to the price of gasoline. Home heating fuel will also cost more, as the HST will add another 8% to the already high price of that precious and necessary commodity. The cost of city water and sewage services will increase, as will Hydro and all professional services including those of lawyers, architects, engineers, psychologists and other consultants. The cost of radio, television and print advertising will all increase by 8%, as will the cost of books, magazines and newspapers. Proponents of the HST argue that it is a “progressive” tax and those with marginal incomes will recover some of their added costs through HST rebates. They also laud the fact that it will save Ontario businesses bundles of money because the harmonization will entail only one tax regime instead of two. But talking about the HST in terms of its being “progressive” is similar to talking about a “moderate” Taliban. And while businesses may experience some savings by having only one sales tax regime, the loss of revenue that businesses will experience because of generally higher prices will more than offset any savings realized from a harmonized sales tax. The HST’s progressiveness is irrelevant if the end result will be a massive dampening of the overall economy that starts with the housing industry. In 2008, the residential housing industry in Ontario accounted for $37.9 billion in overall revenue and supported 380,000 jobs, meaning that each billion in residential construction revenue supported nearly 1,000 jobs. As residential construction revenue drops the number of jobs in that industry will certainly drop as well. In order to soften the impact of the increased costs of having a harmonized sales tax, the McGuinty government is offering Ontarians a one-time payment of $1,000. There’s no other way to look at this gesture than as a cynical effort of Queen’s Park Liberals playing to the lowest common denominator and using that money as a bribe. It’s clear that McGuinty, faced with huge deficits due to the recession, needs to enhance provincial revenues and the HST is one way to do so. But it seems that if the premier really cared about the economic well being of the province he would look at ways to cut spending rather than find new ways to tax us. But that would mean making hard and principled choices, which Mr. McGuinty seems ever reluctant to do.


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Klaus Rohrich -- Bio and Archives

Klaus Rohrich is senior columnist for Canada Free Press. Klaus also writes topical articles for numerous magazines. He has a regular column on RetirementHomes and is currently working on his first book dealing with the toxicity of liberalism.  His work has been featured on the Drudge Report, Rush Limbaugh, Fox News, among others.  He lives and works in a small town outside of Toronto.

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