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

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