Ontario Tax Harmonization

[northern_wind5]

So I'm sure a lot of people have heard about Mr. McGuinty deciding that the GST and PST in Ontario need to be harmonized. So this means everything will have both taxes instead of just some and it will just look like 13% total instead of the GST at 5 and PST at 8 on your bill

Comments

[sun_tzu]

It has been touted as a measure that will make businesses more competitive and efficient but it will definitely just make the average person pay more tax because it adds tax to gasoline, for example. I do like that Dalton's promising to give us all a cheque to offset this on a one time basis (and I'm sure the cheque's in the mail, too. Let's just say I wouldn't count on getting it since he's not exactly what I'd call a "man of his word"). Anyhow, they have been pointing to Nova Scotia as a model for the "benefits" of harmonization, while leaving out that harmonization there integrated the 7% GST and 13% PST into 15% HST so while some costs went up a lot went down. That isn't the plan here so I think the taxpayer is just going to get the knobbly shaft on this deal. However, it remains to be seen. Other than fuel costs rising it probably won't affect me much anyhow.

[siobhan63]

The province is still negotiating this with Ottawa, so nothing has been decided, which is why your cheque ain't in the mail yet. I believe they're hoping to have this in place some time in 2010, which is why the NDP got all pissy that the cheques would be going out just before the next provincial election in 2011...

[sun_tzu]

Well, I'll put it this way. I'm not holding my breath to get a cheque. I'm reasonably confident that some excuse will appear as to why they can't send out the cheques.

[siobhan63]

Don't be daft - it will be right before a provincial election. Of course you'll get a cheque!

[siobhan63]

I moved to Ontario from Quebec just over a year ago and didn't know that Ontario PST wasn't applied to some things. I assumed i was paying PST on just about everything - just like in Quebec, and figured i was already paying more tax since PST in Ontario is a bit higher than the PST in Quebec (altho Quebec will be raising its PST) so i don't see this as a big deal. And if the NDP make one more reference to how much more expensive coffee and donuts will be at Timmy's, i'm going to scream.

[sun_tzu]

The continued existance of the NDP (and their constant stream of junkmail to me) makes me scream, but coffee and donuts tax? Yeah, I'm a little stunned by the fact that that's what they're clutching.

[sun_tzu]

Actually, it will. I don't remember the exact wording of the rules for exemptions but meals under a certain price are PST exempt. The threshold is $4 I think. Under harmonization that will disappear.

[harry_beast]

Harmonizing the sales tax will result in both immediate and long term benefits to the province. Ontario's current economic difficulties are all the more reason to get on with this long overdue reform.

[manmademonster]

"Harmonizing the sales tax will result in both immediate and long term benefits to the province."

Please elaborate.

[harry_beast]

It makes businesses in Ontario more competitive, resulting in more jobs and investment in the province.

http://www.vancouversun.com/news/Case+harmonized+sales+more+compelling+than+ever/1443749/story.html
http://www.fraserinstitute.org/Commerce.web/product_files/GSTHarmonization.pdf

[sun_tzu]

So they say. However other than saving some accounting costs for businesses, no one has explained what these benefits are and as such I'm not convinced. So please, elaborate if you are able.

[snowwalker]

It's been that way in NS for a few years now. Made things a lot simpler. No more tax on tax.

[sun_tzu]

There is no tax on tax in Ontario anyhow. So that particular point is moot.

[harry_beast]

Although manufacturers are permitted to buy materials and production equipment exempt from RST, numerous purchases by manufacturers, from office equipment to delivery vehicles, are subject to RST - a significant cost.
http://www.automationmag.com/index.php/Industry-News/Ontario-manufacturers-could-benefit-from-tax-harmonization-says-PricewaterhouseCoopers.html

Currently, Ontario taxes are applied at multiple stages in the value chain. At each stage, the price of the product rises to cover the cost of taxes. At subsequent stages, tax is applied at the new price. So yes. At the moment, there is tax on tax in Ontario.

[snowwalker]

Well congratulations on that!

[allhatnocattle]

I never understood how harmonization will save consumers money. Seems an odd time to hit the people with increases.