FAQ: Ontario’s new ‘single sales tax’

Answers to the most common questions about the new harmonized tax


How much is it going to be?
The tax will be 13 per cent—the sum of the existing PST (8 per cent) and the GST (5 per cent).

When does it come into effect?
July 1, 2010.

What’s the point of putting the two together if the tax rate is no different than the current one?
The McGuinty government claims the measure will save businesses as much as $500 million by making it quicker and easier to file taxes. The move will also exempt companies from paying any sales tax on purchases aimed at making taxable goods for sale and for which they currently pay the PST. Exported good would be similarly exempt.

Are there any other exemptions?
Yes. Books, children’s clothing and shoes, children’s car seats and car booster seats, diapers and feminine hygiene products—all of which were already tax-exempt—will not be subject to the single sales tax.

Will it increase the tax on any items?
Home renovations, gasoline, home-heating oil, haircuts and fast food, for which the PST doesn’t currently apply, will be subject to the harmonized rate. So prices for those items will increase by eight per cent.

Can I get any of it back?
The province claims its wide-ranging tax reform package, which includes tax cuts for businesses and individuals, will end up slashing the vast majority of Ontarians’ tax bill by about 10 per cent. It has also negotiated to have Ottawa help offset the costs of the new single sales tax by mailing rebate cheques to most residents.

How does the rebate work and when do I get the money?
Families earning less than $160,000 and individuals earning less than $80,000 will receive $1,000 and $300, respectively. The first cheques will be mailed out in June 2010, with subsequent payments taking place in December 2010 and June 2011.

How much money will the government make?
Finance department officials say the entire tax reform package will cost the province $2.3 billion, not counting the $4.3 billion Ottawa will contribute to ease the transition to a harmonized tax. The single sales tax, however, will generate over $2 billion in extra revenue for the province.


FAQ: Ontario’s new ‘single sales tax’

  1. So the Ontario government is jacking up my heating bill by 8%. That’s great, while our income declines.
    That is, if we are fortunate enough to remain employed.

    We will immediately begin adjusting our home budget downward by 10% to offset the increased heating oil costs. This will be on anything non-essential, such as charitible giving (just cancelled our United Way payroll deduction this afternoon), non-essential driving will be eliminated, and we will alter our planned summer vacation (was planning to rent a cottage here in Ontario). Instead, we will take a “stay at home” vacation that doesn’t cost as much. Another hit to our local economy.
    The $1000 bribe is a one time deal, with a recurring hit to our personal budget. The $1000 will be spent on car repairs so that we can keep my older vehicle on the road longer.
    We will continue reducing our personal spending to keep pace with the government excessive increases. This recession (rough waters) will be here a lot longer than people think, with McGuinty at the helm of SS Ontario. We will be voting anything but Liberal in the next provincial election.

    • Good for you Larry!

      By not driving as much you’ll not only be saving money, but also helping the environment. Isn’t that what the government and the media have been trying to get us to do for years?

      Enjoy your at home vacation and take in some local attractions.

      Rather than taking your frustration out on charities, why not try turning the heat down a degree or two and maybe not using the air conditioning as much while during your at home vacation this summer. Guess you’re not too worried about your job if you were going to rent a cottage anyway!

      I’m no Liberal, but this was long overdue and I commend McGuinty for having the guts to do it. Better late than never!

      • Most of us have already adapted our energy consumption habits, so this 8% tax will hurt, especially if we are are single. The rebate isn’t going to offset the increased costs, especially when the cost of oil increases. Higher income people will be able to absorb this – but for low income workers, and those who have lost their jobs or are fearful of losing their jobs, this new tax will pose a real hardhsip.

        • I agree with Cia this is going to be tough on lower income people (old age pensioners etc)

      • well you must be making more then that average Bear to be so chipper about this tax, The man is just trying to vent so let him!! No need to have to hear your Condescending remarks on adjustments to his life.

        and perhaps while your in such a good mood you can contribute to the Chairites as his replacement.
        (while were attemping to gather warmth)

    • @Ben (7.34pm)

      with Green Shift we’d have been getting that money back; and income tax cuts; and the provinces would have been way better off.

  2. @conservative: like, what planet are you from?

    that spin where you blame McGuinty is incredibly lame! more “Marie Antoinette” type talking points i c? cuz, by your selectiveness in your McGuinty vs PMStephen argument, i seriously doubt your sincerity when it comes to caring about the “less affluent” (a very fucci choice of words btw); it’s that Compassionate Conservatism i keep hearing about, isn’t it?

    the GST undercut suckerpunched our federal coffers to the tune of billions (who’s sorry now?); and it benefits someone like your “making-more-than-everyone-else”, “i-gots-mine” self with large purchases. not much difference for others having “less than”. pennies are not impressive savings when a person is priced out of cost-of-living and loss of future prospects for themselves and their children, amongst other things, because collectively we all have less economic strength.

  3. Just my initial reaction as a tax guy:

    Businesses get 100% of GST they pay back. Do they now get 100% of the PST they pay back as well?

    If businesses get 100% of PST back, this will help big business, which has a higher income tax rate, more than small business. PST is a deduction against corporate income tax. (The reduction in paperwork will help small business more.) If business doesn’t get all their PST back, then the paperwork will just be shifted from the PST return to the GST return.

    Ontario will need to have a separate GST monitoring & enforcement system, although the cost of this will probably be less than its current PST administration.

    Exports are exempt. Are out-of-province sales exempt as well? Provinces technically only have jurisdiction to charge sales tax to their own residents. As things stand, if my company here in Saskatchewan buys/rents something from Ontario, the Ontario company only charges GST, and we are required to submit the appropriate SK sales tax to the SK government, & vice versa. (Individuals are exempt in practice because of the administrative mess it would be to enforce. Except for cars, boats, trailers & anything else that needs a license.) We buy a lot of stuff from Ontario. If we get hit by two different PST’s, expect our business to shift to Quebec, BC, Alberta & Manitoba.

  4. I would agree with this 100%, if they made it more revenue neutral.

    Considering all the thigns that now come under the tax, overall it would have been revenue neutral if they made it 7% “PST”, instead of keeping it at 8%. Maybe even 6.5% ish, for a total of around 11-12%.

  5. this is just another reason to leave this country. people here are so unaware of the south. In the US u can live a lot cheaper. houses r more affordable SALES TAX IS SO MUCH LESS (states like delaware new hamshire, alaska have no sales tax). from consumer goods to gasoline costs, cost of living in america is so much better. people like me want to travel and have fun, and canada lacks this so much (boring climate boring ass lifestyle). canadians have no disposable income thats why u see ford taurus’ and old caravans driving around. these candians talkin about go GREEN, yet they drive old pieces of shit cars because they cant afford new ones. i’m canadian and i’m going to school in the states soon. most likely california or florida.

    • Well, while you are there attending school, I hope you take some basic courses in how to communicate in the written word. Your language, syntax and punctuation make you all but unintelligible. I fear that, “most likely”, the only institute of higher learning that will accept you will be the Col. Saunder’s School of Kentuckey Fried Chicken. Cheers.

      • Grow up.

    • up yours – you're not canadian!

    • you are dumb. Enjoy the low sales tax in the states, just don't get sick or need any essential services you get for free in Canada that will be very costly in the US. The cost of living is not less in the US so why don't you stop making up nonsense?

  6. Flaming in connection with a matter that has such serious implications for all of us is just not constructive. The bottom line is that this is a $2 billion tax increase during the greatest economic crisis in nearly a century. Would all those who would defend this kind of tax grab please give your head a shake. Thinking about all the transactions that have never been subject to PST but that will now be subject to provincial sales tax makes me angry. Just for example, the longstanding $4 exemption for take-out meals, which was overdue for an increase, is instead being eliminated at the stroke of a pen. All of the transactions that used to not be subject to PST are suddenly taxed. This is the most regressive tax measure in the history of this province and there is hardly a squeak of protest from our apathetic populace, hell, people on this forum are even defending it!! We deserve everything we get.

    • This is true we compalin for a short period of time and then we just carry on paying and wait for the next retarded decision to be made by the goverment. We really need to scare these politicians. They already know a very low percentage people vote so even if they make bad decisions they target interests of those who do vote to gain control. We are not violent people so the only way we can be heard and put some fear into these guys is to vote. If you know someone who does not vote encourage them to do so. We really need to put this way of life into our childrens lives because I really fear for them. I teach my children to work hard and live honestly but it is hard because in the back of my mind I am feeling ripped off and almost raped by our goverment. The only thing I can do is to teach them the importance of voting and to pass that on to others. We need to get it together as a group!!!!!

  7. Blood sucking devils thats what the word goverment means

  8. I guess I am a bit more verbal about such things. As long as Canadians keep turning a blind eye and stop being afraid of the government these things are going to happen…. Personally I don't believe that all the taxes I pay are a wise investment. The powers that be in Canada all aspire to make Canada into Little America, home of the oppressed and Land of legal slavery. Wake up people and start doing something before it is too late. Remember 5% of the people hold 95% of the wealth and that is the way they want to keep it. Hmmm wonder who in authority will benefit from the 2 billion… Sounds to me like everyone in office will be getting new perks this year…. And yes bring back our soldiers it is not their job to protect big oil company assets under false pretenses… Canada a great place to become a slave… Move to Europe and have a better life….

    • f..uc/k you

    • Yeah, move to Europe. Now there are some great economies to be a proud part of. Sounds like Greece is yer kinda place… BOZO.

  9. Some taxes have been proposed elsewhere (florida) for example and
    people have refused to pay it. They had to eliminate it.
    Canadians are yes people. Why should'nt we refuse to pay it also.
    This is bad for our economy,

  10. If its not broken, don't fix it. What was the problem that was addressed here?

    AS PST.

  12. Which big businesses are you referring to that will benefit ? I totally agree that the common man will be hard hit.

  13. What about residential rent. This is currently both GST & PST exempt will it continue to be exempt. The landlords cost are going to go up eg. Utilities etc. This will mean that next year 2011 they RTA will do a big jump in the rate of rent increase. in 2009 it was 1.8% and 2010 – 2.1% I remember when they brought in the GST the rate jumped to 6% the following year. Not all people who rent are low income but the vast majority of low income people rent. This will hurt.

  14. ill tell you what,you can vote for how you want,it does NOT matter because their all the SAME,people don't understand programs get cut or canceled,the GOV has to find new ways to get PAID,because the politicians will get theirs FIRST, & foremost,there's just to much BIG GOV,bottom line,get rid of all these BUMS & let the PEOPLE run the Country for the PEOPLE,I'm getting really concerned about border line Communism

  15. Well i think this will work great for me:) i don't drive( i bike) i don't eat junk food, and do my own hairstyle..and I'm going to get a check for a 1000 bucks :) .

  16. I really don't know what to say anymore I live on a pension and this will affect me in many ways what up with our government we were proud canadians, what do we need to do for the govermnet to hear us, quit with all the tax hikes. We pay enough. Lets be proud again. We need to be strong like the americans, take charge be heard. Don't let this happen

  17. Right, what I want to know is what ever happened to this being a temporary solution to the debt that we incurred during Word War 1? I've always thought of myself as a Liberal, but since this move was made, it has certainly changed my views. Not only was the first income tax put into place by a Liberal Government led by Mackenzie King, but it has gradually been hiked up since then. This is just another way for the government to earn money from the general population, and it is getting completely out of hand. Maybe the Conservatives will be able to do something about this.

    • I think, Jane, that you need to brush up on your history facts. It was Robert Borden (Conservative) who was PM from 1911 to 1920 and it was during his time in office that the first income tax was imposed on Canadians. The Tories opposed the idea at first but were forced to reconsider their position and impose a "temporary" income tax.
      The PM to succeed Borden was Arthur Meighen, also a Conservative, also post war… stayed with income tax. It was King's Liberal government that attempted to lower income taxes. Several successive governments, be they Liberal or Conservative, have had the opportunity to end taxation but we know that ALL little piggies slurp from the same trough. Don't we? Wake up and take a look around, Jane.

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