Adam Radwanski, today at 8:41 AM EDT
As our editorial earlier this week argued, there's a good economic case for the harmonized sales tax that Dalton McGuinty's government is believed to be considering. But considering that this issue has helped bring down provincial governments elsewhere, there's also the potential for some major fireworks at Queen's Park if the Liberals go through with it.
Just how big those fireworks are could be the first major indication of what sort of opposition Ontario has in the post-John Tory era.
There's not much doubt how the provincial NDP would play it, new leader or not. Although studies have suggested that it's ultimately a wash for consumers, with savings eventually passed down to them, the HST is tailor-made for a left-of-centre party eager to position itself as a defender of the little guy. It reduces the tax load for the dreaded Big Business, while adding tax to stuff like books, children's clothing and women's hygiene products. The province may succeed in getting federal exemptions for some of those items, but probably not all of them - so it should be a major boon to Andrea Horwath as she tries to prove she can get more traction than Howard Hampton did.
For the provincial Tories, though, it's more complicated. With the exception of the health care levy in McGuinty's first year - and even that didn't have a huge impact - they've had a hard time getting Ontarians riled up about much the generally innocuous Liberals have done. If the HST offers potential for some good, old-fashioned populism, it's going to be hard to resist.
On the other hand, it wouldn't make a whole lot of logical sense for the Conservatives to oppose it. Their federal cousins - not least Jim Flaherty, husband of prominent MPP and potential leadership candidate Christine Elliott - have been pushing for merged sales taxes for years. And particularly if they're going back toward small-c conservatism, it would be pretty odd for them to oppose a policy that would reduce taxes for businesses.
As of a month ago, at least, it's something that Tim Hudak - then his party's finance critic, and now its leadership frontrunner - was clearly grappling with, as evidenced by this letter he apparently sent supporters:
Dear Friends,
Since its election in 2003, the McGuinty Government has opposed a harmonized sales tax (HST) in Ontario. However comments recently made by Premier Dalton McGuinty indicate that harmonizing the PST with the GST is under serious consideration by the provincial government at this point in time.
There are a number of models for harmonizing the PST and GST, ranging from full harmonization – where all goods and services are taxed at the full combined 13 percent sales tax rate – to various "made in Ontario" models that allow for certain products to remain exempt from the PST portion of the harmonized tax. Other models suggest a lower combined tax rate across a broader base of goods and services.
As Finance Critic, I will be briefing John Tory and the PC Caucus on how an HST would affect various sectors of the economy. I would greatly appreciate hearing your views on this potential and significant change in tax policy. Kindly email me at this address or give me a call at 416-325-8454.
In closing, please accept my best wishes.
No word if that number has recently been lit up by provincial Liberals, offering their best wishes in return if Hudak will lay off this issue.
Thursday, March 12, 2009
Raising roof on taxes
Melding the PST and GST into one harmonized sales tax could add 6% in taxes to the price of a new home or condo in Toronto, the GTA's home builders' association warns.
The Building Industry and Land Development Association's findings, released yesterday, come as the province considers harmonizing its sales tax with the GST as a means of easing tax regulations on businesses.
For a single family detached home in Toronto with a current price of $745,000, that's an increase of $46,676, the report says.
"As I've said before, many of the business community have made that part of their request to us," Premier Dalton McGuinty told reporters yesterday. "It's one of a variety of options that we're taking a look at."
BILD warned harmonizing the taxes, without exempting the sale of new homes, could ruin an already struggling industry.
While the 5% GST is applied to the selling price of new homes and condos, the PST is only charged on building materials, which BILD estimates adds 2% to the price.
If the two taxes are harmonized, the PST would apply to all products that are taxed by the GST, including new home and condo sales, which would increase the taxes by 6% -- from a 2% provincial portion to 8% of the total price.
That could add an extra $23,220 to the price if an average home in Toronto (currently valued at $387,000 ) was sold new.
'BIGGEST THREAT'
"I've been worried about this since 1991 ... because ever since the GST came into effect, harmonization has been a possibility," said BILD president Stephen Dupuis. "The numbers are just blowing our minds.
"This is the biggest threat that we've faced in a long time," he added.
BILD is not against the harmonization of the provincial and federal sales tax, which would impose one tax collected by the federal government and split with the province, Dupuis said.
In fact, the association said it sees some advantages to it, but wants new home sales exempted.
"We are fighting for housing within harmonization," he said. "It (harmonization) is probably a smart long-term policy."
Although McGuinty did not commit yesterday to exempting new home sales, 28,000 of which were made in the GTA in 2008, he did acknowledge some people don't like the idea of harmonizing the taxes and applying them as one tax.
The PST is currently exempt from some goods such as children's clothing, feminine hygiene products and heating oil.
The Ontario Chamber of Commerce estimates harmonizing the two governments' sales taxes into one would save Ontario businesses $100 million annually -- primarily, because it would cut red tape and reduce administration costs.
The NDP's new leader, Andrea Horwath, said her party's main concern is how the new tax regime will affect prices of goods currently exempt from the PST.
The province has acknowledged the cost of some goods currently exempt from the PST, would increase.
"Children's clothing, feminine hygiene products ... those things will create more expensive costs for people, and that's a problem," Horwath said.
---
TAX-FREE
PST-exempt products that could cost more:
- Books
- Footware costing $30 dollars or less
- Feminine hygiene products
- Children's clothing
- Energy
- Some fees and professional services
- Newspaper subscriptions
- Hairdressing services
---
PRICE HIKE
- New homebuyers would pump an additional $2.4 billion into the province's coffers if the GST and PST are harmonized.
- According to Building Industry and Land Association, purchasers now pay 6.6% -- 5% GST and and about 2% PST on building materials -- in taxes when buying a new detached home.
- If harmonization occurs, the taxes paid on a new home would increase to 13% -- 5% GST and 8% PST.
http://www.torontosun.com/news/torontoandgta/2009/03/12/8716706-sun.html
The Building Industry and Land Development Association's findings, released yesterday, come as the province considers harmonizing its sales tax with the GST as a means of easing tax regulations on businesses.
For a single family detached home in Toronto with a current price of $745,000, that's an increase of $46,676, the report says.
"As I've said before, many of the business community have made that part of their request to us," Premier Dalton McGuinty told reporters yesterday. "It's one of a variety of options that we're taking a look at."
BILD warned harmonizing the taxes, without exempting the sale of new homes, could ruin an already struggling industry.
While the 5% GST is applied to the selling price of new homes and condos, the PST is only charged on building materials, which BILD estimates adds 2% to the price.
If the two taxes are harmonized, the PST would apply to all products that are taxed by the GST, including new home and condo sales, which would increase the taxes by 6% -- from a 2% provincial portion to 8% of the total price.
That could add an extra $23,220 to the price if an average home in Toronto (currently valued at $387,000 ) was sold new.
'BIGGEST THREAT'
"I've been worried about this since 1991 ... because ever since the GST came into effect, harmonization has been a possibility," said BILD president Stephen Dupuis. "The numbers are just blowing our minds.
"This is the biggest threat that we've faced in a long time," he added.
BILD is not against the harmonization of the provincial and federal sales tax, which would impose one tax collected by the federal government and split with the province, Dupuis said.
In fact, the association said it sees some advantages to it, but wants new home sales exempted.
"We are fighting for housing within harmonization," he said. "It (harmonization) is probably a smart long-term policy."
Although McGuinty did not commit yesterday to exempting new home sales, 28,000 of which were made in the GTA in 2008, he did acknowledge some people don't like the idea of harmonizing the taxes and applying them as one tax.
The PST is currently exempt from some goods such as children's clothing, feminine hygiene products and heating oil.
The Ontario Chamber of Commerce estimates harmonizing the two governments' sales taxes into one would save Ontario businesses $100 million annually -- primarily, because it would cut red tape and reduce administration costs.
The NDP's new leader, Andrea Horwath, said her party's main concern is how the new tax regime will affect prices of goods currently exempt from the PST.
The province has acknowledged the cost of some goods currently exempt from the PST, would increase.
"Children's clothing, feminine hygiene products ... those things will create more expensive costs for people, and that's a problem," Horwath said.
---
TAX-FREE
PST-exempt products that could cost more:
- Books
- Footware costing $30 dollars or less
- Feminine hygiene products
- Children's clothing
- Energy
- Some fees and professional services
- Newspaper subscriptions
- Hairdressing services
---
PRICE HIKE
- New homebuyers would pump an additional $2.4 billion into the province's coffers if the GST and PST are harmonized.
- According to Building Industry and Land Association, purchasers now pay 6.6% -- 5% GST and and about 2% PST on building materials -- in taxes when buying a new detached home.
- If harmonization occurs, the taxes paid on a new home would increase to 13% -- 5% GST and 8% PST.
http://www.torontosun.com/news/torontoandgta/2009/03/12/8716706-sun.html
McGuinty faces fight over sales tax shakeup
Premier's talk of merging PST with GST has Liberals fearing backlash from voters
Mar 12, 2009 04:30 AM
Comments on this story (22)
ROBERT BENZIE
QUEEN'S PARK BUREAU CHIEF
Premier Dalton McGuinty's move toward harmonizing the 8 per cent provincial sales tax with the 5 per cent GST is meeting with sharp resistance within his Liberal caucus, the Star has learned.
Behind closed doors in Tuesday's caucus meeting, skittish MPPs aired grievances over the scheme – which would raise consumption taxes on books, feminine hygiene products, heating fuel, children's clothing, diapers and fast-food value meals by 8 per cent while reducing the overall tax burden for business.
The premier has been receptive to arguments from business people who say they are at a disadvantage because they pay more in taxes to purchase equipment or machinery than competitors in Quebec or the Atlantic provinces, where the two taxes have already been harmonized.
But Ontario consumers would feel the impact immediately because many products that are now taxed federally but not provincially would be subject to the equivalent of both taxes under a harmonized system.
"People are nervous," said one Liberal, who like others spoke on condition of anonymity out of fear of reprisal from McGuinty's office.
"No one wants to give voters some reason to toss us out in 2011," grumbled another Liberal.
Quebec, New Brunswick, Nova Scotia and Newfoundland have blended their provincial taxes with the federal goods and services tax and federal Finance Minister Jim Flaherty wants Ontario to follow suit.
McGuinty, who has mused about tax harmonization for weeks as a cornerstone of his plan to jolt the recession-battered economy, confirmed yesterday "it's one of a variety of options that ... we're taking a look at" in Finance Minister Dwight Duncan's March 26 provincial budget.
"We've heard from ... a lot of folks in the business community who are in favour of this. We've heard from others who have got some concerns about this. It's one of a host of options I know the minister's looking at," the premier said.
The government has offered no analysis to determine how much of a benefit or a drain harmonization would be on the provincial treasury.
The Ontario Chamber of Commerce said in a recent report that a straight harmonization of the taxes should have no impact on direct tax revenues. The report urged the province to quickly harmonize the taxes to benefit manufacturers and farmers, among others.
Because the PST would be removed from manufacturers' purchases of machinery, equipment and other items not subject to GST, it would lower their cost of doing business. In the decade after taxes were blended in Atlantic Canada, the chamber found, investment in business equipment and machinery rose a healthy 12 per cent each year above the level before harmonization.
The Ontario Federation of Agriculture estimates farmers pay an additional $25 million annually in provincial sales taxes compared with their counterparts in Quebec and the Atlantic provinces.
The Building Industry and Land Development Association released a study yesterday suggesting harmonizing the taxes would cost new homebuyers $2.4 billion more a year – and add $46,676 to the price of a new home in Greater Toronto.
"There's no point putting the gas pedal to the metal from a stimulus standpoint while braking equally hard with the other foot, but that's what harmonizing the sales tax on housing amounts to," said association chair Leith Moore.
When McGuinty was asked if he worried about paying a political price for slapping an additional 8 per cent levy on some consumer items, he said: "The minister of finance has got to look at that."
Duncan was not available for comment yesterday.
Other Liberals were talking, however, and some are afraid the fix is in to do something that may be good economics but bad politics.
"People were reminding Dalton (in the caucus meeting) about the `fat tax,'" said a party veteran, referring to the 2004 debacle when then-finance minister Greg Sorbara considered ending the PST exemption on fast food costing less than $4.
After an aggressive lobbying effort by the restaurant industry, Sorbara and McGuinty backed down. (Harmonization would mean an additional 8 per cent tax on those value meals.)
Another, more hefty tax – the annual health premium of up to $900 a person – was unveiled in that 2004 budget, something that still haunts some Liberals.
"We were reminding McGuinty about the way that was foisted on us," said one MPP, while another said the premier "has learned a lot from the way that tax was rolled out" and that he consults more with caucus.
"There were lots of questions asked and few answers given," complained another MPP, adding others in caucus noted the fate of Nova Scotia Liberal premier Russell MacLellan, whose 1997 tax harmonization effort contributed to his defeat in 1999.
"There were a lot of horror stories told," agreed another Liberal.But government proponents of blending the taxes argue that Ottawa likely will provide some infusion of cash or exemptions to offset the new tax burden. They point out that was the case with other provinces.
A senior federal official said no decision has been made on financial help to Ontario during any transition, but the insider expressed admiration for McGuinty's boldness.
"It's politically dangerous. We're glad he's looking at doing it, but it could really hurt him," said the source.
Link to post; with additional comments
http://www.thestar.com/News/Ontario/article/600884
Mar 12, 2009 04:30 AM
Comments on this story (22)
ROBERT BENZIE
QUEEN'S PARK BUREAU CHIEF
Premier Dalton McGuinty's move toward harmonizing the 8 per cent provincial sales tax with the 5 per cent GST is meeting with sharp resistance within his Liberal caucus, the Star has learned.
Behind closed doors in Tuesday's caucus meeting, skittish MPPs aired grievances over the scheme – which would raise consumption taxes on books, feminine hygiene products, heating fuel, children's clothing, diapers and fast-food value meals by 8 per cent while reducing the overall tax burden for business.
The premier has been receptive to arguments from business people who say they are at a disadvantage because they pay more in taxes to purchase equipment or machinery than competitors in Quebec or the Atlantic provinces, where the two taxes have already been harmonized.
But Ontario consumers would feel the impact immediately because many products that are now taxed federally but not provincially would be subject to the equivalent of both taxes under a harmonized system.
"People are nervous," said one Liberal, who like others spoke on condition of anonymity out of fear of reprisal from McGuinty's office.
"No one wants to give voters some reason to toss us out in 2011," grumbled another Liberal.
Quebec, New Brunswick, Nova Scotia and Newfoundland have blended their provincial taxes with the federal goods and services tax and federal Finance Minister Jim Flaherty wants Ontario to follow suit.
McGuinty, who has mused about tax harmonization for weeks as a cornerstone of his plan to jolt the recession-battered economy, confirmed yesterday "it's one of a variety of options that ... we're taking a look at" in Finance Minister Dwight Duncan's March 26 provincial budget.
"We've heard from ... a lot of folks in the business community who are in favour of this. We've heard from others who have got some concerns about this. It's one of a host of options I know the minister's looking at," the premier said.
The government has offered no analysis to determine how much of a benefit or a drain harmonization would be on the provincial treasury.
The Ontario Chamber of Commerce said in a recent report that a straight harmonization of the taxes should have no impact on direct tax revenues. The report urged the province to quickly harmonize the taxes to benefit manufacturers and farmers, among others.
Because the PST would be removed from manufacturers' purchases of machinery, equipment and other items not subject to GST, it would lower their cost of doing business. In the decade after taxes were blended in Atlantic Canada, the chamber found, investment in business equipment and machinery rose a healthy 12 per cent each year above the level before harmonization.
The Ontario Federation of Agriculture estimates farmers pay an additional $25 million annually in provincial sales taxes compared with their counterparts in Quebec and the Atlantic provinces.
The Building Industry and Land Development Association released a study yesterday suggesting harmonizing the taxes would cost new homebuyers $2.4 billion more a year – and add $46,676 to the price of a new home in Greater Toronto.
"There's no point putting the gas pedal to the metal from a stimulus standpoint while braking equally hard with the other foot, but that's what harmonizing the sales tax on housing amounts to," said association chair Leith Moore.
When McGuinty was asked if he worried about paying a political price for slapping an additional 8 per cent levy on some consumer items, he said: "The minister of finance has got to look at that."
Duncan was not available for comment yesterday.
Other Liberals were talking, however, and some are afraid the fix is in to do something that may be good economics but bad politics.
"People were reminding Dalton (in the caucus meeting) about the `fat tax,'" said a party veteran, referring to the 2004 debacle when then-finance minister Greg Sorbara considered ending the PST exemption on fast food costing less than $4.
After an aggressive lobbying effort by the restaurant industry, Sorbara and McGuinty backed down. (Harmonization would mean an additional 8 per cent tax on those value meals.)
Another, more hefty tax – the annual health premium of up to $900 a person – was unveiled in that 2004 budget, something that still haunts some Liberals.
"We were reminding McGuinty about the way that was foisted on us," said one MPP, while another said the premier "has learned a lot from the way that tax was rolled out" and that he consults more with caucus.
"There were lots of questions asked and few answers given," complained another MPP, adding others in caucus noted the fate of Nova Scotia Liberal premier Russell MacLellan, whose 1997 tax harmonization effort contributed to his defeat in 1999.
"There were a lot of horror stories told," agreed another Liberal.But government proponents of blending the taxes argue that Ottawa likely will provide some infusion of cash or exemptions to offset the new tax burden. They point out that was the case with other provinces.
A senior federal official said no decision has been made on financial help to Ontario during any transition, but the insider expressed admiration for McGuinty's boldness.
"It's politically dangerous. We're glad he's looking at doing it, but it could really hurt him," said the source.
Link to post; with additional comments
http://www.thestar.com/News/Ontario/article/600884
Call for 'harmonizing' taxes is off key
TheStar.com - Opinion - Call for 'harmonizing' taxes is off key
March 11, 2009
Re: Harmonize taxes, Editorial March 8
I find it difficult to understand why you support "harmonizing" the GST and provincial sales tax. You admit it will increase the tax burden on consumers and raise the cost of items like heating fuel that are currently exempt from the provincial sales tax for good reasons.
The shift will mean hundreds of millions of dollars less in revenue for the provincial treasury – at a time when there is a great need for provincial supports for those affected by the economic downturn.
And you add that this will have a major negative impact on the already beleaguered housing sector.
The arguments for the move, such as less tax on materials and equipment used in production, are outcomes that can be achieved by reducing or removing taxes judiciously on these items. The move would reduce paperwork for companies, you propose, but system conversions are always costly.
Your plan to protect low-income households with an estimated $370 million would also involve costs in complex paperwork and may not protect these households much.
There are creative and fair ways to assist Ontario industries. Any fiscal changes made to deal with the economic crisis we face must be demonstrably beneficial. "Harmonization" does not meet that test.
Mary-Ellen Kavanagh, Mississauga
Please check out more letters@
http://www.thestar.com/letters
March 11, 2009
Re: Harmonize taxes, Editorial March 8
I find it difficult to understand why you support "harmonizing" the GST and provincial sales tax. You admit it will increase the tax burden on consumers and raise the cost of items like heating fuel that are currently exempt from the provincial sales tax for good reasons.
The shift will mean hundreds of millions of dollars less in revenue for the provincial treasury – at a time when there is a great need for provincial supports for those affected by the economic downturn.
And you add that this will have a major negative impact on the already beleaguered housing sector.
The arguments for the move, such as less tax on materials and equipment used in production, are outcomes that can be achieved by reducing or removing taxes judiciously on these items. The move would reduce paperwork for companies, you propose, but system conversions are always costly.
Your plan to protect low-income households with an estimated $370 million would also involve costs in complex paperwork and may not protect these households much.
There are creative and fair ways to assist Ontario industries. Any fiscal changes made to deal with the economic crisis we face must be demonstrably beneficial. "Harmonization" does not meet that test.
Mary-Ellen Kavanagh, Mississauga
Please check out more letters@
http://www.thestar.com/letters
Harmonize taxes, but with care
TheStar.com - Opinion - Harmonize taxes, but with care
March 08, 2009
After years of debate and false starts, the time has finally come to "harmonize" the provincial sales tax with the federal GST.
Putting the two taxes together as one harmonized tax of 13 per cent – as four provinces have already done – would be good for business and good for the economy.
For businesses, a harmonized sales tax would relieve them of the paperwork and legal burden of meeting the requirements of two different tax collectors. It would also reduce the cost of the materials and equipment used to make their products, which are now subject to the provincial sales tax but not the GST. These business "inputs" would effectively be tax-free under a harmonized sales tax.
"All of this adds up to businesses that are more competitive and better able to go head-to-head with companies around the world," says Len Crispino of the Ontario Chamber of Commerce. "For example, manufacturers that have been extremely hard hit by global competition would be able to produce products at a lower cost, helping them preserve jobs here in Ontario."
For the economy, harmonization would mean long-term increases in gross domestic product, productivity and household incomes.
But there are political downsides to harmonization, which is why no Ontario government has done it over the past two decades. And the McGuinty government must proceed with care if it chooses to harmonize the two taxes in the March 26 provincial budget.
First of all, harmonization would shift more of the tax burden to consumers. And it would tax some items not currently subject to the provincial sales tax, such as heating fuel and restaurant meals under $4. Accordingly, there must be some built-in protection for low-income Ontarians. The chamber of commerce suggests a tax credit of $500 for every low-income household, which would cost about $370 million. * Tax Credit doesn't help at point of purchase. Some lower income people would not benefit from tax credit.
Furthermore, the shift to a harmonized tax would mean less revenue for the provincial treasury. Although estimates vary, the loss would be in the range of hundreds of millions of dollars. * "WOW- Pst expanded in HST to cover more goods and services results in less revenue for the Provincial Treasury? Do the editorial writes want to to buy some swamp land in Florida that is for sale?"
Federal Finance Minister Jim Flaherty has described harmonization as the "single most important step" that could be taken to make Canadian businesses more competitive. Ottawa, then, ought to provide transitional funding to Ontario, as it has for the provinces that have previously taken this step.
Finally, harmonization would have a major negative impact on the housing sector, already hard hit by the recession. That's because while new homes are subject to the GST, they are exempt from the provincial sales tax.
If the full 8 per cent provincial sales tax were applied to new homes under harmonization, it would more than double the tax on a $350,000 house or condo to $39,200.
To get around this problem, the builders have suggested the provincial share of the harmonized tax on new homes be limited to around 2 per cent. * 2% still means $7000 cost added on to house prices. I can only predict that in the future government would likely raisethe percentage once the HST has been accepted.
With these caveats, the McGuinty government should begin moving toward harmonization in the upcoming budget.
Thursday, March 5, 2009
Toronto Star Promotes 13% HST for Ontario Budget
Opportunity in Ontario budget
Feb 28, 2009 04:30 AM
Grabbing headlines this week was a forecast from TD Bank chief economist Don Drummond of a $13 billion provincial deficit, thanks to the "free fall" of the American economy.
It was noted that a deficit that size would be even larger than the record $12.4 billion registered by Bob Rae's much-maligned NDP government in the 1992-3 fiscal year. (Albeit, the Rae deficit was still proportionately larger, as the provincial budget was half as big in those days.)
The deficit forecast contributed to the crisis-like atmosphere at Queen's Park as the provincial government prepares to bring down its budget on March 26 with its revenues falling amid demands for more spending.
"These are some of the toughest times we've ever seen in Ontario," concedes a sombre Premier Dalton McGuinty. "The global economic crisis that has our province in its grip is deeply affecting us."
But the crisis also presents the government with an opportunity to make this a transformational budget – one that will provide lasting benefits beyond the current economic tsunami.
In the United States, President Barack Obama is taking a transformational approach with a proposed budget that has a deficit of $1.75 trillion but includes measures to reform health care and combat global warming.
In Ottawa, on the other hand, the ruling Conservatives produced a budget with a big deficit ($34 billion) but no measures that could be described as transformational. Instead, there were a lot of half-measures. It was, as many commentators remarked at the time, an opportunity lost.
At Queen's Park, we are told, there is a debate underway within McGuinty's government whether to make this a budget of "big ideas" or an incrementalist document. We favour the former.
Please note the following: Endorsement for the 13% HST. (Bloggers Emphasis.)
For example, the provincial budget could: make a major down payment on programs to reduce child poverty (which the government is committed to cutting by 25 per cent in five years); re-energize the restructuring of health care, including primary care reform and computerization (which seem to have lost steam); invest heavily in development of a green car (to make Ontario the centre for this technology); provide incentives for business to spend more on research (where we badly trail the U.S.); make it easier for Ontarians to get a post-secondary education (only 40 per cent do now); and harmonize the GST and the provincial sales tax (which would be a major boost for businesses, especially in the hard-pressed manufacturing sector).
Government funding for these ideas might have to come with conditions to ensure, for example, that the money is not simply soaked up by salary increases.
Like Obama's health-care and climate-change initiatives, some of these measures would be politically controversial and would encounter resistance from entrenched interests. But an economic crisis may provide enough cover for the McGuinty government to move ahead.
And all of these ideas would help Ontario weather the current economic storm. More importantly, they would also pay dividends long after the storm has passed.
To see the original Editorial from the Star please goto the following link:
http://www.thestar.com/comment/article/594419
Feb 28, 2009 04:30 AM
Grabbing headlines this week was a forecast from TD Bank chief economist Don Drummond of a $13 billion provincial deficit, thanks to the "free fall" of the American economy.
It was noted that a deficit that size would be even larger than the record $12.4 billion registered by Bob Rae's much-maligned NDP government in the 1992-3 fiscal year. (Albeit, the Rae deficit was still proportionately larger, as the provincial budget was half as big in those days.)
The deficit forecast contributed to the crisis-like atmosphere at Queen's Park as the provincial government prepares to bring down its budget on March 26 with its revenues falling amid demands for more spending.
"These are some of the toughest times we've ever seen in Ontario," concedes a sombre Premier Dalton McGuinty. "The global economic crisis that has our province in its grip is deeply affecting us."
But the crisis also presents the government with an opportunity to make this a transformational budget – one that will provide lasting benefits beyond the current economic tsunami.
In the United States, President Barack Obama is taking a transformational approach with a proposed budget that has a deficit of $1.75 trillion but includes measures to reform health care and combat global warming.
In Ottawa, on the other hand, the ruling Conservatives produced a budget with a big deficit ($34 billion) but no measures that could be described as transformational. Instead, there were a lot of half-measures. It was, as many commentators remarked at the time, an opportunity lost.
At Queen's Park, we are told, there is a debate underway within McGuinty's government whether to make this a budget of "big ideas" or an incrementalist document. We favour the former.
Please note the following: Endorsement for the 13% HST. (Bloggers Emphasis.)
For example, the provincial budget could: make a major down payment on programs to reduce child poverty (which the government is committed to cutting by 25 per cent in five years); re-energize the restructuring of health care, including primary care reform and computerization (which seem to have lost steam); invest heavily in development of a green car (to make Ontario the centre for this technology); provide incentives for business to spend more on research (where we badly trail the U.S.); make it easier for Ontarians to get a post-secondary education (only 40 per cent do now); and harmonize the GST and the provincial sales tax (which would be a major boost for businesses, especially in the hard-pressed manufacturing sector).
Government funding for these ideas might have to come with conditions to ensure, for example, that the money is not simply soaked up by salary increases.
Like Obama's health-care and climate-change initiatives, some of these measures would be politically controversial and would encounter resistance from entrenched interests. But an economic crisis may provide enough cover for the McGuinty government to move ahead.
And all of these ideas would help Ontario weather the current economic storm. More importantly, they would also pay dividends long after the storm has passed.
To see the original Editorial from the Star please goto the following link:
http://www.thestar.com/comment/article/594419
Wednesday, March 4, 2009
Things we may have to now pay tax for.......
This list outlines some -- but not all -- goods and services that are taxed under GST but not under PST. - Energy, including electricity, diesel oil, home heating oil, liquid petroleum gases, natural gas, motor gasoline, coal, and fuel wood - Books, newspapers and magazines sold by subscription - Children's car seats and booster seats - Children's clothing - Feminine hygiene products - Footwear costing $30 or less - Prepared foods sold for $4 or less - Audio books purchased by persons who are legally blind - New homes (although RST is levied on building supplies) - Personal services, including dry cleaning, barber and hairstylist services, manicures and pedicures - Professional services, including legal and accounting services, architectural, engineering and scientific services - Rentals of commercial property - Real estate commissions - Membership fees -- e.g., athletic gym memberships - Taxi and limousine fares - Admissions to live theatres - Admissions under $4
Harmonized Sales Tax is coming
The Harmonized Sales Tax (HST) combines the GST and PST into a single tax which means that many formerly PST exempt goods and services will now be subject to the new combined tax of 13% (5% GST + 8% PST).
Estimates from the three Maritime provinces where it is already in effect (Nova Scotia, New Burnswick and Newfoundland-Labrador) indicate that the implementation of the HST in Ontario will result in an increase of $1billion in new taxes for Ontario residents in the first year of the tax.
The federal government is pressuring the province to adoptthe HST and is offering transition funds to assist in its implementation. Supporters claim that the tax will provide large savings for businesses and provide incentives for investment and business expansion.
During a time when tens of thousands of people in Onatrio are losing there jobs it becomes very attractive to the Ontario Government to assist businesses and try to retain jobs as well as receive the extra revenue from this tax.
The HST is supported by theToronto Star and many business groups. The Ontario Finance Minister is considering introducing the tax in his March 2009 budget statement. Premier Dalton McGuinty is on record as seriously considering this tax for Ontario. It is reported in the news that the Canada Revenue Agency is funding workshops to discuss the implememntation of the HST tax.
Kurt Christensen lives in Markham, Ontario and is a former business owner and Scarborough City Councillor. He strongly believes that the public has not been fully consulted about the benefits or possible negative impact of the HST and would like to see an open and full public debate on the new tax before the matter proceeds any further.
Kurt has been a community activist for many years: as afundraiser and Master of Ceremonies For Scarborough Day at the CNE; as the founder and Chair of the Scarborough Tourism and Convention Board; as the Honourary Chair of the Scarborough Restaurant Association; as a lobbyist for local issues; as a founder of several community associations; and, as a Knight of the Malta for community service. Presently, he teaches Civics in the High Schools of Toronto where he encourages his students to become more civic minded citizens.
The following survey will be presented to the Premier at a future date.
Please indicate if you support or do not support this new tax for Ontario. Please click on the link below:
http://snappoll.com/poll/316481.php
For further information please send your emails to kurtechristensen@yahoo.ca
Here is so more information for you to make an informed decision.
http://www.yourhome.ca/homes/article/578862
http://www.facebook.com/l.php?u=http%3A%2F%2F
http://www.torontosun.com/comment/columnists/christina_blizzard/2009/02/22/8481471-sun.html&h=f9a97aaa3eae610b21229688c37949eb/
Estimates from the three Maritime provinces where it is already in effect (Nova Scotia, New Burnswick and Newfoundland-Labrador) indicate that the implementation of the HST in Ontario will result in an increase of $1billion in new taxes for Ontario residents in the first year of the tax.
The federal government is pressuring the province to adoptthe HST and is offering transition funds to assist in its implementation. Supporters claim that the tax will provide large savings for businesses and provide incentives for investment and business expansion.
During a time when tens of thousands of people in Onatrio are losing there jobs it becomes very attractive to the Ontario Government to assist businesses and try to retain jobs as well as receive the extra revenue from this tax.
The HST is supported by theToronto Star and many business groups. The Ontario Finance Minister is considering introducing the tax in his March 2009 budget statement. Premier Dalton McGuinty is on record as seriously considering this tax for Ontario. It is reported in the news that the Canada Revenue Agency is funding workshops to discuss the implememntation of the HST tax.
Kurt Christensen lives in Markham, Ontario and is a former business owner and Scarborough City Councillor. He strongly believes that the public has not been fully consulted about the benefits or possible negative impact of the HST and would like to see an open and full public debate on the new tax before the matter proceeds any further.
Kurt has been a community activist for many years: as afundraiser and Master of Ceremonies For Scarborough Day at the CNE; as the founder and Chair of the Scarborough Tourism and Convention Board; as the Honourary Chair of the Scarborough Restaurant Association; as a lobbyist for local issues; as a founder of several community associations; and, as a Knight of the Malta for community service. Presently, he teaches Civics in the High Schools of Toronto where he encourages his students to become more civic minded citizens.
The following survey will be presented to the Premier at a future date.
Please indicate if you support or do not support this new tax for Ontario. Please click on the link below:
http://snappoll.com/poll/316481.php
For further information please send your emails to kurtechristensen@yahoo.ca
Here is so more information for you to make an informed decision.
http://www.yourhome.ca/homes/article/578862
http://www.facebook.com/l.php?u=http%3A%2F%2F
http://www.torontosun.com/comment/columnists/christina_blizzard/2009/02/22/8481471-sun.html&h=f9a97aaa3eae610b21229688c37949eb/
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