A few kind words for harmonization - Macleans.ca

A few kind words for harmonization

ANDREW COYNE: It isn’t a tax grab. Prices won’t increase. So why all the fuss?


Do the people leading the charge against harmonizing the sales taxes of B.C. and Ontario with the federal GST imagine this is the first time such a reform has been introduced? Do they suppose the public does?

It would be one thing to attempt to whip the population into hysterics against a “risky, untried scheme” that had never been implemented elsewhere. It would be tiresome—essentially an endorsement of the doctrine that Nothing Should Ever be Done for the First Time—but it would at least be coherent, as demagoguery goes.

But the forces arrayed against the plans to convert the two provinces’ existing sales taxes next July into a broader, GST-style value-added tax—a ragtag army of special interests and opposition parties that includes the federal NDP and the National Citizens Coalition, the Ontario NDP and the Ontario Progressive Conservatives, the B.C. NDP and Bill Vander Zalm—must confront the troublesome fact that four provinces (Quebec, Nova Scotia, Newfoundland and New Brunswick) have already done so, without ill effect. And not only them: at last count, 143 countries around the world had implemented similar value-added tax regimes. Not one of them has renounced them.

Likewise, a campaign that railed against sales taxes of any kind, on the grounds that they are regressive, complex, etc., would have a certain coherence to it. If the opposition were proposing to abolish the provincial sales tax, they would at least be in an honourable political tradition, even if they would have to explain where else to find the revenue it raises. But that is not their position.

Rather, the proposition they seek to uphold is this: that the two provinces should continue to tax some goods and services, but not others; that the tax should apply, where it does apply, at wildly uneven rates, depending on how many times it has been imposed at various stages in the production chain from raw input to finished good; and last, that we should, through the combined operation of two separate and uncoordinated sales taxes, federal and provincial, each with their own set of exemptions, in effect maintain four different regimes in each province, depending on which of the two taxes applies in any given case: both GST and PST, GST but no PST, PST but no GST, and neither GST nor PST.

That, stripped of its rhetoric, is what the opposition amounts to: a numb devotion to the status quo, no matter how grotesque; and an appeal to the ignorant fear that any change must, by definition, make things worse. But change in this case amounts only to unwinding the worst features of the current regime. In brief, a harmonized sales tax (HST) amounts to three things:

One, broadening the existing provincial sales tax to cover the same broad range of goods and services as the GST. (Or nearly so: both provincial governments have announced exemptions to a select list of politically sensitive products, such as coffee (!), newspapers, tampons, and children’s clothing.)

Two, rebating the tax paid on business inputs, as with the GST, so that only the tax on a business’s “value added” (the difference between what it charges its customers and what it paid its suppliers) gets passed on to the next stage of production. This ensures the final consumer only pays the tax once, and at a single rate.

And three, simplifying the tax, with a common federal and provincial tax base and an integrated collection system—though this is attenuated somewhat by the exemptions I mentioned.

Why is a broader tax regime to be preferred? Because you want people to make economic decisions, whether as consumers, workers or investors, based on the real costs and benefits of their choices—not the tax preferences attached to each. Every sector that was previously exempt from PST in each province is now bitterly complaining of ill treatment. But all they are really saying is that they were the beneficiary of special treatment before.

Does this amount to a “tax grab,” as so often is complained? It would, if the only thing being contemplated were a simple broadening of the existing sales tax base. But harmonization doesn’t just mean a broader tax: it also means rebating the tax on business inputs. So while the price of some goods will undoubtedly rise as a result of the reform, the price of others will fall.

Yes, fall: where the tax was previously built into the price of intermediate goods, to be taxed again at the next stage of production, and the next, and the next, until it has compounded to who knows what level, now the consumer will pay only the official rate. Many goods that are now subject to the PST, therefore, will see absolute price reductions. Even goods that were untaxed until now—at the retail level—may see little or no price increase, once the tax on inputs drops out. Because, in effect, they were taxed: it was just buried in the price.

I know this conflicts with the invincible folk-economic wisdom that no cost savings are ever passed on to the consumer, but are simply pocketed by business, who are, all of them, colluding in a massive nationwide price-fixing scheme and can just charge whatever they like (why do prices ever fall, then?). But in fact that’s exactly what happened in the provinces that previously harmonized: a study for the C.D. Howe Institute found prices in the Atlantic provinces generally fell by 0.3 per cent, while some large items fell as much as three per cent. The same happened when the GST first came in, as a replacement for the old Manufacturers Sales Tax.

(Ah, the GST. We all know what happened there, don’t we? As a recent National Post editorial put it: “Canadians were assured the GST would be revenue-neutral when it was introduced two decades ago, and look how that turned out.” Yes, let’s look, shall we? In its last full year, 1989-90, the MST yielded some $17.7 billion: equivalent to 15.3 per cent of federal revenues, or about 2.7 per cent of GDP. In 2005-06, the last full year before the Harper government began cutting the GST, the tax yielded $33 billion. Tax grab? Hardly. In fact, that was down to 14.9 per cent of revenues; as a share of GDP, it was also down, to 2.4 per cent.)

Do the price reductions in some goods completely offset the price increases on others? No. But the extra costs hardly justify all the caterwauling. A study by TD Bank projects a net increase in prices from Ontario’s HST of 0.7 per cent. The Ontario Chamber of Commerce puts the extra per capita cost at less than $70, while the B.C. government says a single person earning $25,000 will pay just $13 more a year. Of course, to those on very low income, that’s still an extra burden they can hardly afford. But here’s the thing: they don’t have to. Both provinces are beefing up their existing low-income sales tax credits as part of the exercise, in amounts that exceed any addition to the cost of living.

And just in case the rest of us feel left out, both provinces are also bringing in middle-class tax credits—$1,000 per family in Ontario—and income tax cuts. Add it up, and both provinces stand to lose significant sums from the reform, though both are compensated by the transfer of billions of dollars from the federal treasury. You wouldn’t think provinces would have to be bribed to do the right thing, 20 years too late, but there you are.

So it isn’t a tax grab. And it isn’t just a tax cut for business. But it is that, too: while most of the savings, according to the TD Bank, get passed on to the consumer, the rest—$6.9 billion—goes to reducing the cost of investment. The C.D. Howe Institute has calculated sales tax reform will reduce Ontario’s marginal effective tax rate on capital by 11 percentage points. Its former president, Jack Mintz, in a new study for the University of Calgary’s School of Public Policy, estimates this will trigger more than $47 billion in new investment in the province over the next decade, and 591,000 new jobs.

Indeed, the benefits of harmonization are so great that it is difficult to imagine either provincial government backing down. Before too long, Ontario and B.C. will be followed by Manitoba and Saskatchewan (Alberta has no sales tax), whose industry will be anxious not to be put at a competitive disadvantage relative to their neighbours. Harmonization will become the status quo, to be defended as fiercely as once it was opposed.


A few kind words for harmonization

  1. Andrew, here's why you're wrong. Previously, provinces that combined the rates had an overall reduction of the rate. Please tell of any province that harmonized and had an increase in the combined tax rate because of exemption losses, as will happen here. Good luck finding one. The BC government has claimed the tax is revenue neutral, and will save business 1.9 billion per year, so guess where this money is coming from.
    Secondly, the service sector and new home construction will be absolutely hammered by this tax. Great news for a fragile recovery. It's also hammers the fees paid on mutual funds, which is a real joy to anyone with an RRSP.
    A simple question. After the HST, will I have more money in my pocket, or less? The answer is clearly less. What you need to rationalize is why this is good for me.

  2. B.S. I live in a province where there is HST. When the GST drop, small items like cat food, paper towels, you know the kind of things people buy all the time. My brand if cat food, went up 5 cents a can, and later on in the year of first 1% GST decrease, another 2 cents on the price.
    Didn't save a penny on the 2 % decrease, because companies grab it for themselves by increasing the price for themselves. In Ontario, if HST is implemented, Ontario folks will be in for a rude surprise, where the yearly average HST costs, will come close to $1000 or more, depending on what the consumer has purchased or chose as services. My monthly HST for cable, telephone, Internet – you know the kind of things most people have – plus your heating fuel is the average of $50.00 per month. The real reason HST is being implemented, it is the best way to ensure steady revenues and increasing revenues for both levels of government. There are steady and increase over time, because the taxable products and services are items that are necessary in today's age. As for consumers who are already paying HST, since on the average we are paying close to a $1000 per year.

    • "..companies grab it for themselves by increasing the price for themselves…"

      Your favourite brand of cat food must be operating in a monopoly situation, there is no free market for cat food in your area, or the cat food companies are in collusion to raise the price of cat food. That's a pretty profound failure of the market economy in your province!

    • Nat, how is it that you don't save when taxes are cut, but you lose when taxes are raised? The fact that you would argue both sides of that one demonstrates the silliness of your argument. Besides, how do you really know how many inputs that already had PST charged on them ended up in that cat food? Maybe the price will drop. I'm not saying it will, but many prices did drop after the GST replaced the MST. (And many others went up.) That is established fact. And @alanpater is exactly right. The only way a company could "absorb" the GST reduction is if they faced no price competition – either a monopoly or a cartel situation. Maybe the pet food companies do have an illegal cartel, but it's the first I've heard of it.

  3. It is a tax increase and prices will go up. Only Andrew and Santa believe companies will pass any savings on to consumers. The tax load is endlessly shifted to working peoples pay cheques.

    • Lets consider an example that demonstrates that companies do indeed pass on savings. What did an average computer cost in 1991? I recall we paid about $4000 for one. Right now I am writing this post on a dell netbook that ran for 1/10th of the cost, though it is about 60 times faster than my old computer from '91. Clearly productivity gains have been passed on to the consumer by the manufacturers of computers.

      The key variable to understanding how much gets passed on is price elasticity (how responsive is demand to the price of a good). If a good is price inelastic (like oil), savings are not likely to be passed onto consumers. Where a good is highly elastic, they are. If you are a firm in a highly elastic market, you have a very strong incentive to undercut the competition, and sell more goods, should your costs suddenly decrease.

      • Well that makes me feel better. What you're saying is the computer I need to buy every four or five years will drop in price, but the oil I buy twice a week will rise, along with housing, plumbing, car repairs, veterinarian services, airline tickets, cable tv, cell phones, dinner out, funeral services, etc etc etc.
        Come to think of it, anyone out there willing to work for cash?

  4. As always Coyne, a great and dispassionate defense of good, sound public policy. Who seriously would vote for the NDP because of the HST? Only idiots with zero long-term memory. With the NDP not only would you still get the HST, but throw in a IST, JST, and KST as well.

    First the GST and now the HST is the result of a determined effort to bring hidden taxes out into the spotlight, front and centre, so that consumers are buying products at their true price and value.

  5. Oh, where to begin with this one. Let's start with the three changes…

    (1) Broadening doesn't require harmonization at all. It would be entirely open to any province to simply apply its sales tax to the same range of goods as the GST – meaning that the harmonization deal does nothing but to short-circuit the province's ability to decide for itself whether it actually agrees with the federal government as to the appropriate range of goods included.
    (2) Rebating more than contradicts the supposed benefit of (1), as taxes on the broadened base of goods are paid by a narrowed set of payors. Hence the overall drop in government revenue – even as individuals pay more.
    That leaves (3) as the closest there is to a theoretical benefit to harmonization – but again, there's no reason why a common collection system couldn't be developed without dragging the other two elements along for the ride.

    • The goal isn't to "broaden", but to harmonize. Why would they broaden without harmonizing? They're broadening only because it is required under harmonization. Broadening without harmonizing would be the worst of both worlds. It would extend the inefficient and market-distorting PST to more goods. The fact that provinces are taking a revenue hit in order to make this thing work should be all the evidence anyone needs that it isn't a tax grab. We whined incessantly about the GST (then some of us whined again when it was cut) and no doubt we'll whine about harmonization too. But it is the right thing to do, and at least McGuinty is willing to pay the political price for doing it. Hudak will find out, much like Chretien did, that opposing the GST is really easy in Opposition. Much harder in government.

  6. On average the tax probably will be about equal. But specifics matter.

    For what I do, it will increase by 7% on around half the invoice. The gst on labour is 5%, now it will be 12%. For anyone working in construction or services to homeowners, the tax means higher costs. There are little offsetting savings anywhere to drop the prices. The only offsets we will see is pst paid on tools, vehicles, fuel and odds and ends that are used but not charged to the customer. I doubt if anyone will be decreasing their prices because of that. An added expense is difficulty in collecting. 12% is higher than the profit margin, so if a customer refuses to pay (which isn't uncommon, especially when we compete against those who don't charge it) the 12% comes out of pocket; ie. all the profit and more gets sent to the government. So that risk, depending on how often it happens, may force price increases.

    Or drive more of the economy underground.


  7. Of course it's a tax increase! It is very simple. The tax base for the GST is much, much larger than the tax base for the PST. If you harmonize, the govt will reap more revenue. Where will that revenue come from? The taxpayer of course! As well, the portion of PST that businesses used to pay will now be shifted to the consumer.

    Spin it however you like, but it is without question a tax increase.

    • They are cutting income taxes by 1 ppt in Ontario, as well as cutting corporate income taxes significantly. All these changes will result in lower government revenues than the status quo would have yielded, therefore we will see a tax cut. It's not hard folks. Your arguments otherwise involve anecdotal evidence and handwaving.

      • Cutting corporate income taxes means a double reduction for business. I doubt that a 1% income tax rate will offset the amount of increased taxes most people will pay. Certainly the tax benefit is in inverse relationship to the taxpayer's income. Or more simply, the lower a taxpayer's income, the more net taxes they will pay.

        I think that when we check back in a year or two, we will see that all of these changes result in a net increase in tax revenue.

        • ‘You think’, eh? Forgive me for not putting much stock in your gut feeling, when weighed against economic analysis of government revenues that have been shown to have some predictive power.

          And there is no ‘business’ and ‘consumer’. Taxes on business are never borne by the owners, in the long run. It is either borne by employees in the form of lower wages, or consumers in terms of higher prices. Lowering taxes on investment will spur a great deal of it in Ontario over the next few years. These investments will lead to many new jobs, as well as an increase in productivity (and thus pay) for many others. Your folk economic wisdom has been repeatedly shown to be incorrect in jurisdictions around the world. Yes, no one likes to pay taxes, especially ones that are out in the open like the HST. But it’s a good thing for Ontario. And it is most definitely not a tax grab.

  8. Oh, where to begin with this one. Let's start with the three changes…

    (1) Broadening doesn't require harmonization at all. It would be entirely open to any province to simply apply its sales tax to the same range of goods as the GST – meaning that the harmonization deal does nothing but to short-circuit the province's ability to decide for itself whether it actually agrees with the federal government as to the appropriate range of goods included.
    (2) Rebating more than contradicts the supposed benefit of (1), as taxes on the broadened base of goods are paid by a narrowed set of payors. Hence the overall drop in government revenue – even as individuals pay more.
    That leaves (3) as the closest there is to a theoretical benefit to harmonization – but again, there's no reason why a common collection system couldn't be developed without dragging the other two elements along for the ride.

  9. I can't think of a better way to screw up the book industry in Ontario more than it already is

  10. Lots of rationale regarding the benefits to business and the cost reduction of products to consumers and how we will be better of overall. I think we should look at HST in a different way….the total tax is too high. We Canadians debate about tax benefit versus the need to eliminating or reducing taxes in our lives. This discussion should be about our demand for useless services and the elected members of government spending beyond the taxes collected. We're able to piss away $1 billion on a E health care project with little worry about replacing the money. We the taxpayer pay for this mismanagement by new taxes and have to suffer the indignity of being told it's good for us.

    Put taxes to a vote and get the real sentiment from the taxpayer. I guess that would be too much of a reality check.

    Enough of us working most of the year just to pay taxes….enough of mismanagement of OUR dollars. This country could learn from the U.S taxpayer….they simply say NO.

  11. Coyne here is dead-on in saying that this isn't a tax grab. It's a shift of taxation, from a more complicated system with a less desirable tax on business to a more desirable tax on consumption (as the bulk of economists and economic think-tanks indicated when Harper cut the GST, consumption taxes tend to be far less detrimental to the economy than income taxes or corporate taxes).

    That said, I disagree with Coyne when he says that the implementation of the HST will lead to a drop in prices, at least in the short term. That's not what economists are indicating right now, and given how much Ontario businesses are struggling right now, I couldn't expect it to. There will be some offset, as those businesses fight for sales, but I doubt it will be a full offset. However, I'm not so sure that's a bad thing. We do need more spending to bolster the economy, but it's far better that such spending is based on real needs and useful purchases, not just based on people taking advantage of (temporarily) lower prices. Further, the real concern these days is unemployment, and if those businesses keep some of the HST benefits, they'll have more room to hire (or hire back) employees – and so many of them overcut their staff just to stay afloat. Sales might be down, but they're already down, so if companies start making more per sale, it'll be all the better when sales do inevitably pick up again during the recovery.

    I'm usually not a fan of the federal Conservative economic policies, but good on 'em for urging the provinces to implement the HST.

  12. I can see Andrew probably uses his company's credit card to fill up his car and has someone book his flights for him, so he won't notice the 8% hike. Also, as a small-c conservative, shouldn't he be concerned about the erosion of provincial autonomy by having everything go to the feds before trickling down to the provinces (with each level of the bureaucracy taking their cut, of course)?

    • This is basically all handwaving. Never mind logic, never mind the evidence,

  13. Andrew, comparing government revenues and GDP percentage between 1989-90 and 2005-2006 is hardly an apples to apples comparison.

    After all, you're comparing the end of the late 80's recession to basically the peak of 2000's boom. That the GST was a smaller percentage of government revenues and GDP is hardly any great surprise because our GDP per capita had expanded so much on its own.. it's the law of large numbers. $10 is a higher percentage of $100 than $99 is of $1000, even though it's over a 9 fold increase.

    And more honest to the discussion anyway would have been to compare what the GST took in immediately after its inception and compared to the MST. That you didn't do that suggests to me that the numbers didn't come nearly as rosy as you'd like.

    After all, just because it might be a good idea in the long term doesn't mean it's a good idea right now, in what the conservatives themselves continually term as a "fragile" recovery.

    • The comparison of GST revenues as a percentage of GDP is a pretty fair comparison. GDP is down during a recession and up during boom, but spending follows the same trend. Plus, the GST applies primarily to discretionary spending rather than essential purchases (most food and housing are exempt, for example) and discretionary spending absolutely plummets during recessions while strongly increasing during booms.

      That all adds up to what should be more GST revenues as a percentage of GDP during booms and less during recessions. Add in the slowly declining savings rate of Canadians over that time (and what isn't saved must be spent) and it all just adds to Coyne's assertion.

      But all this is a moot point anyway, because there doesn't need to be a drop in revenues to evidence Coyne's point, only the lack of a significant rise. I'd like to see the numbers from the year after the GST was implemented as well, but as nothing of real consequence changed from that time to 2006-7, I don't think it would contradict Coyne's argument at all.

  14. If Andrew's comments were honest and not simply meant to support commercial business interests the column would include the number of new taxable commodities the harmonization will add to Ontario and BC taxation and the amount the tax did add to the taxation of residents in the already harmonized sales tax provinces. There is little doubt political parties in power will pay a huge political price for the unnecessary taxation at this time of recessionary pressures.

  15. Did anyone else think that the picture of the guy with clenched fists look like Rumsfeld?

    • That's crazy Bill Vanderzam. You remember him. He started the great political tradition that reached it's culmination with Lyin' Brian. You know, accepting oodles of cash in hotel rooms from shady characters. After all when you get payed in cash you avoid all those pesky taxes you have to pay in this country. At least until the truth comes out. Cheers.

  16. When the wonderful GST was implimented I was an independant sales rep for one Company. Revenue Can. decided I was a business and was informed by a pirky miss on the phone. I was to learn that this would entail become an unpaid tax collector and accountant for government. For all intents and purposes I was doing a tax return 4 times a year. I was doing this for free while paid civil servants regularly went on stike for more pay. The same people who would sit around looking bored while maxing out their pensions during an audit. They had all the time in the world. I did not. The implimentation of the GST was the beginning of the end for my whole industry. I estimate 100,000 decent if modest, middle class jobs quietly dissappeared across the country. I will never, ever again run my own business in this country. That's for suckers and fools. Only if I was supplying goods or services TO government. Then you can make out like a bandit. Have a nice fricken day.

  17. The HST will make a stronger economy for Ontario and Canada. It is interesting that the Conservatives in Ontario are screaming and want the taxpayers to yell, but they wanted this action before in the Harris era. Also they deny that the Federal Conservatives are expecting this to happen and they don`t even lend their support for their Federal partners.
    Lastly, they won`t remove this tax when they think they return to power.
    The economists strongly support it
    The Liberals want a stronger economy in Ontario, so let`s get on with it.

    • What a load of crap! Another lieberal peice of s—!! You idiots don't even think about senior who were veterans and had their own business for years only to watch these governments steal our money, year after year telling us that we won't raise taxes and within months doubled them so that they could raise their wages! Don't tell me that Dalton McGinty is worth well over $150,000 while I as a pensioner, veteran and businessman earn around $17,000 per year after working for over 60 years!

      Go to Hell Don S!!!!

  18. I'd love to see a story on Hydro Quebec's planned purchase of New Brunswick Energy and the possible startegic implications for Newfouldland & Labrador and Maine!

    I think this subject is right up MacLean's edotors' alley!

  19. Nice artical but when it has incorrect info
    Quebec does not have HST infact Quebec's PST (QST) is also charged on the GST. Just shows the the autor needs to check his facts because without correct information this is just Fiction

  20. All I know is that starting July 1, I will have to charge my customers 8% more than I did before. That will lead to a drop in sales, a loss of revenue and likely layoffs. As to Coyne's comparisons with GST, I recall Mark Twain' s line about lies, damn lies and statistics. Harmonize what was previously subject to the PST and leave the rest alone. If you don't do that it is a naked tax grab. Coyne's article is indefensible.

  21. Well given the track record governments in Canada have of listening to "the people", I wouldn't hold my breath at the HST being kaiboshed in ON or BC. A simpler solution would be to move to AB. I've been here 1.5 years and still amazed at how small the bill is at the checkout paying only 5% instead of 13% in sales tax. I figure I save about $2000 a year on this alone – before the difference on income taxes which are significant too. Though I will say groceries are more expensive (but not subject to GST).

  22. It seems like yesterday Harper won the front office seat by lowering the GST 2% . Hello if Iggy votes with Harper it's a loose, loose scenario … They loose the voters and voters vote both Liberal (F&P) out next election and Harper blames you for the HST, stating you had a chance to defeat it so wrap up, fold your tent and go home.

    It seems like yesterday Mulroney introduced the GST and albeit he quit they left the PC's with two count em 2 seats! and the birth of Reform/Conservatives. ( all guess who put them in Ottawa? )

    PS for what it is worth we here in NS were railroaded with all kinds of crap over the the HST and in the end they even taxed the air we breath the water we drink and ground we walk on! And you can be sure we have told Ontario and BC in spades!

  23. I have sat down at some point, and figured out that my family will pay around 1,300 in additional tax per year, and that is including the tax cut to the lowest income bracket that is in the proposed legislation
    I am surprised at how much emotional hair-splitting occurs about impact on the consumer while it is all the matter of 5th grade math – estimate your expenses that will become taxable for provincial part, and add 8%, subtract your personal income tax – that is your total.
    I have built a web site based on my calculator – try it please: http://www.ItsMyProvince.ca
    That is consumer's viewpoint. Businesses will profit from this, I agree. But whether and how much of those profits will be passed to consumer, is uncertain. Tax increase on same consumer from HST is absolutely certain though…

    • Neat calculator. For my family, we net out to a gain of about $75 per year! Plus the additional one-time $1000. Now I'm even more in favour of harmonization than I was previously.

    • Interesting calculator, if very simplified. I ran it, and it looks like I will see an increase in tax of about $125 per month!! Much of that is the additional tax paid on the fees to have my retirement savings professionally managed – very necessary as I am recently retired, my nest egg is as big as it will ever get, and I need professional help to preserve that money to live on for the rest of my life.

      I expected to take a hit from this, but never this big!

  24. sorry, forgot to make one more point: our government has very cleverly mixed good measure ("single tax") with tax increase, and both (pro and contra) camps managed to completely confuse people and public discussion by failing to separate these two effects.
    yes, please harmonize the PST !! but for god's sake, why increase taxes at the same time ? make it truly neutral on consumer's budget, then nobody will be able to say that this is a tax grab.

    • Those on the left will call it a tax grab no matter what. Which is odd since the NDP has never seen a tax it didn't like when they got the loot to squander.

      • I could not be farther from NDP with their socialist rhetoric, but on this matter, I agree – from my family's standpoint, HST increases the taxes we pay, so it IS the tax grab

  25. Obviously most of you have not read any government news releases. I don't know what Ontario has done but B.C. has removed the PST portion on a host of items. Just because GST is charged on something does not mean that PST will automatically be charged when we go to HST. The single best thing about the HST is that it makes a whole bunch of provincial employees redundant and we can get rid of them. Many of the people who are railing against the HST did the same when GST was introduced simply because they had no idea how the old MST worked because it was burried in the price and PST was then added to that so in effect we were paying tax on a tax. As taxes go consumption taxes are better than income taxes.

  26. they should have knocked the combined tax down to 10% then less people would be complaining

  27. This HST should be turned down! As previous people have spoken to the price of goods will NOT go down. I have an idea where the information came from and it was another right wing think tank telling us how great this is for business. What about the truth to consumers. Once again the rich corporations get a break and the little guy trying to edge out a living gets stiffed again. I am getting disappointed with peoples lack of intelligent debate on matters. If you are in support of the right wing agenda LOWER taxes and LOWER services including healthcare, roads, infastructure, and all of the other things that are provided to us through taxes. Don,t go complaining when crime, homelessness, and peoples general reliance on social programs increases. I don't mind people having an opinion, but showing your lack of education by slamming other parties or people who support them as idiots just shows how intelligent you people really are. Everyone gets opinionated from time to time but NAME CALLING AND ATTACKING only seems to come from people who are supporting the right wing agenda. INTERESTING

  28. If this weren't a tax grab – or laying the groundwork for one in the future – why would they do it?

  29. The HST tax is a Federal managed tax. Once BC and Ontario allow this tax to become law it will mean that the Federal Government will dole out the money to Ontario and British Columbia. Hence these provinces give up the autonomy of provincial taxation and become subservient to the Federal Government. It will be up to the discretion of the Federal Government as to what these provinces will receive and when.
    It will also be used by the Feds to whip the provinces into line by withholding the tax when it's to the Feds advantage. Not to mention that in a few years a new provincial value added tax will be introduced in BC and Ontario after the HST has been forgotten by the electorate.
    Canadians have the right to say how their hard earned money is spent and the only way to do that is to allow the electorate to have a binding vote on what taxes are paid and how they will be applied.

  30. TOTAL BS article written from a perspective that doesn't take into account how the average person lives, works and spends money. Any savings are not guaranteed to be passed down through the chain to the consumer. Many industries do not have much opportunity to recover taxes, and therefore are forced to essentially raise what their consumers are paying. In my own example, I am self employed in a fee-for-service white collar consultant role. I have little if ANY materials or services for which I pay on behalf of my clients and pass the cost to them (ie. I have other suppliers direct bill my clients for the services I do not provide). All it means for me is that most of my clients will see a larger invoice, which also means I cannot realistically raise my rates this or next year. It is a bullshyte tax grab by a sorry excuse for a government — why not tax the banks who caused the economic downturn and who are now profiting MORE THAN EVER BEFORE. This country needs a bloody revolution to clean house.

  31. As always Coyne, a great and dispassionate defense of good, sound public policy. Who seriously would vote for the NDP because of the HST? Only idiots with zero long-term memory. With the NDP not only would you still get the HST, but throw in a IST, JST, and KST as well.

    First the GST and now the HST is the result of a determined effort to bring hidden taxes out into the spotlight, front and centre, so that consumers are buying products at their true price and value.

    I very much agree with KRB.

  32. That was a great info to have a look at and the comment by Craig O was very impressive.

  33. very simple, it is a tax increase