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McGuinty to consider harmonizing sales tax

From Friday's Globe and Mail

Ontario Chamber of Commerce recommended the move Thursday, saying it could save businesses $100-million a year ...Read the full article

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  1. Doctor Beaker from Black Rock, Saint Lucia writes:
    June 4, 2007

    Ontario Premier Dalton McGuinty promised Sunday that he won't raise taxes if he is re-elected this fall and insisted he really means it this time.

    The premier, who ran on a no-new-taxes platform in the 2003 election and then introduced one of the largest income tax increases in provincial history, said Ontarians should believe him now 'because I'm in charge.'

    As I understand it, there is no PST on services and if you buy materials that you pay to have installed, then there is no PST on the material. Under a harmonized sales tax, these things would be taxed.

    Therefore, unless Mr. McGuinty lowers the provincial rate, the harmonizing of the sales taxes will be another tax increase.
  2. Gardiner Westbound from Canada writes: .
    Sounds like a trial balloon. And another Fiberal promise goes 'poof'.
  3. Stephen Dedalus from Canada writes: I have no idea what any of this means.
  4. David N from Toronto, Canada writes: Doctor Beaker from Black Rock, Saint Lucia writes: The premier, who ran on a no-new-taxes platform in the 2003 election and then introduced one of the largest income tax increases in provincial history.

    Could you please jog my memory with some details? What income tax increase would that be?
  5. Cross the Border and up the Hill from Canada writes: Typical. The guy doesn't admit to it when Flaherty suggested the Ontario government do something. The guy waits and then does this to 'try' and make it look like he's brighter than he actually is. What's wrong Dalton? Flaherty was busy until late to give you more advice? You weasel. I guess having everything from the feds for so long would make one ease up on the whole thinking bit. Maybe now that you have to spend wisely will you actually use that peanut between your ears.
  6. Greg Gibson from London, Canada writes: I don't have a huge problem with this as long as the rate is reduced a bit to compensate taxpayers for the increased costs of the many things that are currently exempt that will now be taxed. Of course there's zero chance of that happening.
  7. Jamie Bryce from Toronto, Canada writes: Harmony...

    would be getting rid of McGuinty and his friend Miller... then maybe we could get someone in there who knows how to run a business effectively and with efficiency.
  8. Doctor Beaker from Black Rock, Saint Lucia writes:
    David N., I just googled

    mcguinty raise taxes

    and I copied that quote from the first article on the list
  9. Howard Young from Canada writes: No way, not if we lose the exemptions.
  10. At Large from Canada writes: Please please harmonize fully so that businesses can just put the final full price on their merchandise once and for all. Why force consumers to have to calculate percentages every time they buy something? By now, yes, we get it, there's a PST and a GST; get over it and just tell me how much I need to pay for something. The rest of the world can figure this out; why can't we?
  11. Bruce Gerrard from Toronto, Canada writes: This is a good idea for the province. One McGuinty should have recognised 2 years but instead he was playing political games on behalf of the Liberal party of Canada. Instead of wasting millions of dollars on their stupid 2 cents of the GST, the province and the city could have struck a deal that Toronto could receive a portion of the increased Provincial revenue as a result of the tax harmonization. Again, Mcguinty is just out of touch with reality and is now caught in another lie and another tax increase.......
  12. Systemic Risk from Canada writes: The Daltoid must have figured out there's something in it for the public sector unions - I mean the whole reason he is premier was to give OPSEU CUPE etc the keys to the public treasury.
  13. Stan L from Canada writes: I wonder if this is in aid of getting at some of that 'infrastructure' spending the Conservatives are going to be doling out next week....I wonder if this was a condition of getting that support ? I wonder if Dalton simply imagines that if he does this, Harper will look more favourably on Ontario?

    Regardless, McGuinty's a twit.....and once again throws himself into something that doens't need his attention at the moment.
  14. David Harrison from Canada writes: This is a terrific idea and will simplify things for businesses. It's not so much the calculation of the tax by the cash register but the back-end administration work of dealing with two sales tax mechanisms and authorities.

    Obviously, there would need to be a rate reduction to compensate for the loss of the exemptions. Something like a combined 10% rate sounds about right, and it would have the benefit of making manual tax calculations trivial.
  15. Used to be there from Canada writes: David N from Toronto: the income tax hike referred to is the 'health care premium', which actually goes into general coffers.
  16. Jimmy K from Toronto, Canada writes: I should give him credit for seeing the light, for seeing the obvious benefits of something every economist has been saying is a no brainer for years, but The fact that it has taken so long has made me question his judgement and abilities as a leader.

    Basically what's happened is the recession has emptied the piggybank, so now he needs to find other previously cost free 'not a priority' policies to be seen as helping the economy. McGuinty is an embarassment. But hey, at least he may have finally got this one right.
  17. Alistair McLaughlin from Canada writes: This only makes sense. Yes, it will broaden the base of the PST, as some items & services that currently charge GST are PST exempt, but big deal. The GST is 2 points less than it used to be, so there really should be no objections to harmonization. Having two entirely separate sales tax systems, lest we offend someone by adding the PST to their hydro bills, is BEYOND retarded.
  18. Apu Nahasapeemapetilon from Vancouver, Canada writes: Is it true about Quebec? I was there this past summer and there were clearly two taxes on all sales receipts; a QST and GST. Whereas in Newfoundland, there is only the HST.
  19. Chester Rockwell from Canada writes: Jimmy K from Toronto, Canada writes: 'I should give him credit for seeing the light, for seeing the obvious benefits of something every economist has been saying is a no brainer for years, but The fact that it has taken so long has made me question his judgement and abilities as a leader.'

    Just to play devil's advocate, McGuinty was probably afraid of getting booed by some yahoo who has no idea what he was talking about (see Doctor Beaker for a prime example.) I know, I know it is a no brainier from any logical standpoint, but politics is based on appeasing stupid people. As far as idiot proof economic policy goes, this is probably actually not that popular with the grunting classes. VATs in general are political sepeku, which is odd given the love normally professed by economists for them.
  20. Alistair McLaughlin from Canada writes: Apu, Quebec is harmonized, but differently than the eastern provinces. I believe the QST is piggy-backed upon the GST, but it is still basically calculated in such a way that avoids most of the duplication of a separate PST.
  21. Steve I'm Not an Alberta Redneck from Calgary, Canada writes: Stephen Dedalus from Canada writes: 'I have no idea what any of this means.'

    You should. Currently most provinces have their own separate sales tax from the GST, imposing a tremendous burden on businesses, all across the country. The savings and increased efficiency to be realized by combining this is enormous but petty politics and stupidity among many people who think they will pay more because of things like more tax on baby clothes is preventing this from occurring.

    If Canada were a real country, most of these internal barriers would just be eliminated but Prvinces have way too much power here.
  22. bob london from Canada writes: Original Dalton. Was your high school designed by Tony Hawk?
  23. J M from Calgaristan, Canada writes: Why not gothe whole step and harmonize provincial and federal taxes across the country. Pro-rated for population, the overall rate would drop to 11% and benefit pretty much all Canadians.
  24. The Money Ain't For Nothing from Toronto, Canada writes: Used to be there from Canada writes: David N from Toronto: the income tax hike referred to is the 'health care premium', which actually goes into general coffers

    You can 'spin' it anyway you want - fact is any taxes we pay as part of the income tax collection and filing process is 'income tax' and the Dalton lied and broke his 'written' promise not to raise income taxes.
  25. Joy O'Brien from Chatham, Canada writes: How is the weather in your part of the country, in south western Ontario we are having an especially snowy cold winter, and in Saskatchewan they have had really cold, seems like only place actually effected by global warming is the Artic, even Ireland had snow this year.
  26. GlynnMhor of Skywall from Canada writes: Howard Young from Canada writes: '...not if we lose the exemptions.'

    The exemptions are not a benefit, they're a curse. Businesses have to track items with PST but no GST, GST but no PST, GST and PST, and neither GST nor PST.

    And a consumption tax is the fairest and least damaging mode of taxation. Tax everything that moves and everything that doesn't at one low rate. There shouldn't be exemptions even on GST. And especially not exemptions that apply sometimes but not other times. The same small carton of milk, for example, is taxed at a cafeteria, but not at a grocery store; it's totally silly.
  27. GlynnMhor of Skywall from Canada writes: What we need in Canada is a GST at about 20% (with the different governments divvying up the loot however) and an income tax at the same flat rate of about 20%.
  28. L P from Canada writes:
    Even Southern China had snow.
  29. Alistair McLaughlin from Canada writes: Howard Young, you are willing to see the continued existence of an absurdly over-complicated tax because of a few exemptions?
  30. chris cosby from Sudbury, Canada writes: Some services are PST-exempt. Some goods are GST-exempt. 'Harmonize' and it's the consumer who will be singing off-key, since we will then be paying a unified tax on everything we buy or use, even if we were not before the 'harmonization'. However, business will be happy to be allegedly saving large sums, and it's no mystery whose good opinion McGuinty really values - us suckers (that would be the voters) only count in election year, and that's not coming up till 2011. By that time, our short little memories will have forgotten all about it.
    Oh yes, to David N.: the tax increase that was referred to is the amount we all now pay for OHIP's somewhat questionable services.
  31. John Connor from Canada writes: Stephen Dedalus from Canada writes: I have no idea what any of this means.
    ---------------------------------
    Worry not Stephen, neither does McShafty.
  32. The Money Ain't For Nothing from Toronto, Canada writes: GlynnMhor of Skywall from Canada writes: What we need in Canada is a GST at about 20% (with the different governments divvying up the loot however) and an income tax at the same flat rate of about 20%

    Please don't forget an additional / another flat rate of 20% for David Miller. Given the way he is behaving with additonal taxes and user fees via the additioanl powers given to him by the Dalton he really thinks he is a nation all by himself.
  33. Crusty Curmudgeon from Ottawa, Canada writes:

    Yet another reason to get get rid of Fibber McGuilty -- but alas -- Ontario is fileld with sheep -- so no doubt the righteous indignation that should develop will not be there.

    Fibber -- 10 People 0

    It most certainly is a tax increase as it will place a provincial tax on things are not now currently taxed (and no doubt will put GST on items that do not now have a tax).

    Anyone who believes in the LIEberal party should take another good look at this pack of liars.

    They will not reduce the percentage tax -- simply apply a higher tax to items that were not previous at that rate -- that is the way that the LIEberal party operates -- tax them until they bleed -- keep lying that the rerason is to maintain services rather than tell them the real truth -- that their provincial government is incompetent.

    You dumb sheep -- rise up!
  34. Ron Preston from Belle River, Canada writes: Mr. McGuinty is not harmonizing the taxes for OUR benefit it's only for his benefit. WE Ontarians will take another hit in the wallet which is how the Liberals work and this is just not Provincially.
  35. Seven Aitnine from Cambridge, Canada writes: how about the GST exemption on a private sale of a used car ... were already getting screwed paying tax on an automobile everytime it changes hands. Perhaps making gov't more efficient is the key to savings.
  36. Omnibot 2000 from Toronto, Canada writes: For businesses, HST simplifies nothing. Businesses still need to separate out the 'federal portion' for calculating Input Tax Credits. And do you think Ontario wants to lose the extra 2% tax on liquor? No way. They'll add a 2% liquor tax. The only people who benefit from this shenanigan are the folks who make cash registers.
  37. F Dionne from Toronto, Canada writes: Crusty Curmudgeon from Ottawa, Canada writes: 'You dumb sheep -- rise up!'

    To do what? Replace the Liberals with the Conservatives and their idiotic policies? People like you won't be happy until all taxes disappear. Who cares what you think?
  38. Used to be there from Canada writes: The Money Ain't For Nothing from Toronto, Canada writes: Used to be there from Canada writes: David N from Toronto: the income tax hike referred to is the 'health care premium', which actually goes into general coffers

    You can 'spin' it anyway you want - fact is any taxes we pay as part of the income tax collection and filing process is 'income tax' and the Dalton lied and broke his 'written' promise not to raise income taxes.

    I know that, and I wasn't spinning anything - someone else mentioned McGuinty enacting one of the largest tax hikes in Ontario history, David N questioned this assertion, and I was answering David N. And given that I called it a tax hike and noted that it went into general coffers, where was the 'spin' anyway?
  39. Loki Wils is learning new tricks from Canada writes: There were howls in Alberta when the GST was introduced. Before, the provincial tax was harmonized, so you knew what you were paying before you approached the till.

    Yeah, this winter is nuts. My biggest complaint is when people don't move their cars when the plows come through.
  40. R R from Canada writes: Yes, we the common folk who live in the Provinces listed as having a harmonized sales tax love the idea of paying provincial tax on top of the combined retail price and GST, rather than having each tax applied separately to the original retail price. This is commonly referred to as a tax increase using smoke and mirrors sprinkled with just more than a little political disdain for the common working man. But hey... we're Canadians.. we accept that our leaders know what's best for us.
  41. Dave Hodson from Newmarket, Canada writes: Omnibot 2000 from Toronto, Canada writes: For businesses, HST simplifies nothing. Businesses still need to separate out the 'federal portion' for calculating Input Tax Credits.

    Uh, no they don't. Businesses file a single GST/HST return with CRA (there is still a QST return in Quebec), and there is no seperation of any implied provincial portion, nor are there any filings to be made for PST for NF, NS or NB who have harmonized.
  42. The Money Ain't For Nothing from Toronto, Canada writes: Used to be there from Canada writes given that I called it a tax hike and noted that it went into general coffers, where was the 'spin' anyway

    by referring to it as 'health care premium' tax. Call it what it is 'personal income tax'. If I missed understood you.........sorry
  43. Alan Pater from Vancouver, Canada writes: Yeh, I agree, a 20% harmonized GST, split 3 ways - federal, provincial, municipal.
  44. sam stone from Toronto from Canada writes: If McHuinty likes this, it is because it will fill his coffers with tons of new tax. Here is a list of items that will become taxable under McGoofy's new scheme: New House (currently only the material is taxable not the labour), land, legal fees, real estate commissions, prepared meals under $4.00 (yes that includes your Timmy coffee), hair cuts, installation labour for real property, vitamins, books, hydro, natural gas, internet services, accounting fees, mortgage discharge fees as well as bank charges and the list goes on. Please don't believe the IDIOTS that say the rate will be reduced to equalize the burden!!!
  45. Scrappy T from Canada writes: McGuinty won't do anything on his own initiative. He will wait to see what happens after the budget secretly hoping the coalition gets in. He has become quite a socialist premiere with his nanny laws.
    He who stands for anything, stands for nothing.
  46. John __ from Westy, Canada writes: Business have to submit taxes federally and provincially. Harmonized means they submit it all to Canada Revenue and Canada Revenue sends the province portion. Less admin work for businesses and centralizes the tax collection.

    I would LOVE to see all prices displayed in Canada with tax, so what you see what you pay. It would make things easier for Canadians and tourists.
  47. Syed Raihan from Toronto, Canada writes: Rate should be reduced to 10% HST. It will be easy for every one to calculate and no one to loose.
  48. Cienna . from Toronto, Canada writes: 'Stephen Dedalus from Canada writes: I have no idea what any of this means.'==============pay no attention to that 'you should' comment; it's okay that you don't know and I give you kudos to admit it. What it means is this: The provincial tax PST (8%) would be added to the GST (5%). This means no matter what you buy, the total tax you will be charged is 13% approximately.

    Checkout this link for detailed information regarding tax structures: http://en.wikipedia.org/wiki/Salestaxesin_Canada
  49. Dan Shortt from Toronto, Canada writes: Alistair McLaughlin from Canada writes: 'This only makes sense. Yes, it will broaden the base of the PST, as some items & services that currently charge GST are PST exempt, but big deal.'
    -------------------------------
    I'm afraid it IS a big deal for me. When I make a purchase I like to know exactly how much PST and GST I'm paying. And if I wasn't paying PST on an item or service last week, I don't want to be paying PST on the same item or service next week! Not unless I know that it was deliberately intended to be that way, instead of just some kind of unintended consequence due to 'harmonization.'

    It might be convenient for businesses, but I don't see it being convenient for consumers.

    'It only makes sense'? I think the province has dollar signs in front of its eyes, and is thinking that it will 'make CENTS' for gov't coffers!
  50. The Dupes from ottawa, Canada writes: How could armonizing these taxes save businesses money? This will cost millions to the retail industry just to set up their cash registers to show one tax. This makes no economic sense.
  51. Dennis sinneD from Calgary, Canada writes: Dan Shortt from Toronto, Canada writes: '...
    I'm afraid it IS a big deal for me. When I make a purchase I like to know exactly how much PST and GST I'm paying. ...'

    Dude, buy a calculator.
  52. Still Learning at 78 from Canada writes: 'Save business 100 million a year', to be downloaded to the retail consumer. That should get a lot of votes, Right?
  53. Brian B from Canada writes: Since comiing to office, McGuinty (I will not raise taxes_) has introduced a ecotax on motor oil, a disposal tax on tires a new $20million tax on paint manufacturers which the consumer will have to pay, of course. Does anyone have a complete list of all the taxes (I will not raise taxes) McGuinty has introduced?
  54. Freddie B from Woodbridge from Canada writes: Alistair McLaughlin from Canada writes: Howard Young, you are willing to see the continued existence of an absurdly over-complicated tax because of a few exemptions?
    =========================================
    A few exemptions. THINK AGAIN!!!!!!!
  55. Freddie B from Woodbridge from Canada writes: Dennis sinneD from Calgary, Canada writes: Dan Shortt from Toronto, Canada writes: '...
    I'm afraid it IS a big deal for me. When I make a purchase I like to know exactly how much PST and GST I'm paying. ...'

    Dude, buy a calculator.
    =======================================
    If you had a PST, you would care!!
  56. Omnibot 2000 from Toronto, Canada writes: @ Dave Hodson from Newmarket ON:

    WRONG. Before you chime in and play tax expert, try reading the regulations dude.

    'If you buy goods or services in a participating province
    (Nova Scotia, New Brunswick, or Newfoundland) you will
    pay HST. When you calculate your eligible amount, you
    have to separate the federal portion (7%) and the provincial
    portion (8%). The calculation is as follows:
    purchase price including HST × 7/115 = federal
    portion of HST
    purchase price including HST × 8/115 = provincial
    portion of HST'

    Source: RC4034(E) Rev. 00
  57. sam stone from Toronto from Canada writes: People that care about their tax burden better start calling their MPP's to stop this madman before it is too late. McGuinty has ballooned the public service and now has to pay for it. Yeah, a few tax auditors will go to CRA, but that is peanuts compared to the hiring Ontario has done. In 2005 Min of Revenue had ONE assistant Deputy Minister. Today there are FIVE. They make about $175,000 per year. He needs more tax.
  58. Still Learning at 78 from Canada writes: Business gets payed to collect the tax and gets all the taxes payed back. The loss of a 100 million in tax shall be payed by you the working man.
  59. Dennis sinneD from Calgary, Canada writes: Freddie B from Woodbridge from Canada writes: '...
    =======================================
    If you had a PST, you would care!! '

    ..

    Hey, I care. I'm saying (and I know I was a bit blunt) you can easily calculate the tax on most products. You can know how much tax you expect, versus how much you're charged.

    Besides, wouldn't the retailer still show the taxes as separate line items still?
  60. Dan Shortt from Toronto, Canada writes: Dennis sinneD from Calgary, Canada writes: 'Dude, buy a calculator.'
    -----------------------------
    I already own more than one calculator, you effin' idiot.
  61. Dennis sinneD from Calgary, Canada writes:

    Then what's the real problem, Dan. Seriously.
  62. sam stone from Toronto from Canada writes: Dennis sinneD from Calgary, Canada writes:

    Then what's the real problem, Dan. Seriously.
    ==================================
    The problem is that this tax will be huge and people don't realize. How would you like to pay PST on the purchase of a new house in addition to GST??????
  63. Dan Shortt from Toronto, Canada writes: Dennis sinneD from Calgary, Canada writes: 'Then what's the real problem, Dan. Seriously.'
    -------------------------
    Seriously, the real problem, as many here are pointing out, is that harmonization will probably mean new Provincial Sales Taxes on items and services that were previously exempt from PSTs.
  64. Dennis sinneD from Calgary, Canada writes:

    I'm pretty ignorant about provincial taxes (obviously). I just assumed that you pay provincial tax on anything you pay GST on.

    If that is not the case, I'd freak at this notion.
  65. Offshore Reg from bridgetown barbados, Canada writes: What religious school funding did for John Tory, this will do for Premier Dalton. Generally I would probably classify myself as a liberal supporter' however I shall be looking elsewhere should he head in this direction. 'Save businesses' money? Give me a break. No government initiative is ever driven by reducing revenue to it. From what I gather, professional fees, which currently are PST exempt now will be taxed. Gee, saving me money? As a consumer of those services, not likely; as a provider of those services I will have more paper, more reporting, and more remittances. No thanks.

    Dalton, lying is not becoming. This is about increasing provincial revenues. Dalton, admit it. Come on.....the truth will set you free.

    Man, it just never ends.
  66. Andrew Gretzinger from Mississauga, Canada writes: Hey Ontario, you voted for this guy. You know what they say: 'Fool me once shame on you, fool me twice shame on me.'

    That goes DOUBLE for all those outraged Toronto folk in this thread at the prospect of paying higher taxes when it is YOU who vote Liberal no matter what. You deserve what you get.
  67. Zee Man from Neustadt, Canada writes: No more taxes!!! Please!!! I am being taxed to death. My income keeps shrinking and my expenses keep going up. Example.
    The last 20 days of heating my house came to $23.00 per day.
  68. Alistair McLaughlin from Canada writes: Dan Shortt, your explanation made no sense. Why would you pay PST on the same thing twice? You pay two taxes on most things now, and HST wouldn't change that. Those exemptions don't add up to much anyways, and the province can offset the loss of exemptions by paying out a provincial portion of the GST credit.
  69. Alistair McLaughlin from Canada writes: It amazes me that people who sneeze at a 2% reduction in the GST will at the same time panic over the loss of a few PST exemptions.
  70. Peter Wojnar from Hamilton, Canada writes:

    >>“We've consistently said Ontario would not agree to any proposal on harmonizing with the GST that would increase the tax burden on Ontario taxpayers, particularly on essential items such as home heating oil, children's clothing, books, and other items which are exempt from PST,” Ontario Finance Minister Dwight Duncan told reporters earlier this week.

    Excuse me?

    When have the Ontario Liberals EVER been concerned about raising the tax burden on Ontario taxpayers???
  71. Freddie B from Woodbridge from Canada writes: Alistair McLaughlin from Canada writes: It amazes me that people who sneeze at a 2% reduction in the GST will at the same time panic over the loss of a few PST exemptions.
    ==========================================
    It's not a few exemptions. If you are ignorant about PST, admit. Don't make isiotic statements.
  72. Dave Hodson from Newmarket, Canada writes: Omnibot 2000 from Toronto, Canada writes: @ Dave Hodson from Newmarket ON: WRONG. Before you chime in and play tax expert, try reading the regulations dude. 'If you buy goods or services in a participating province (Nova Scotia, New Brunswick, or Newfoundland) you will pay HST. When you calculate your eligible amount, you have to separate the federal portion (7%) and the provincial portion (8%). The calculation is as follows: purchase price including HST × 7/115 = federal portion of HST purchase price including HST × 8/115 = provincial portion of HST' Source: RC4034(E) Rev. 00 ----- Omnibot, you are seriously confused! What you have quoted is simply a calculation to determine the amount of GST or HST included in the total price paid. This is a calculation that is typically used by organizations who don't claim full Input Tax Credits for all GST or HST paid. For example, many Not-For-Profits or Government agencies will expense the full invoice amount paid into their general ledger, as opposed to journaling the GST/HST to its own G/L account. For organizations that lump it all together but are entitled to claim a rebate for some of what they have paid, this is a simple calculation they can do to figure out how much they have paid in GST or HST. What you have cited is certainly not part of a businesses normal tax filing, and there certainly is never any seperation of the provincial portion from the federal portion. Trust me, I know the regs very well as I live them every day.
  73. Peter Wojnar from Hamilton, Canada writes:

    >>Dan Shortt from Toronto, Canada writes: Seriously, the real problem, as many here are pointing out, is that harmonization will probably mean new Provincial Sales Taxes on items and services that were previously exempt from PSTs.

    True, but there are alternatives.

    People spend much more money on things other than just the Ontario PST exempt items.

    So harmonize and at the same time lower the Ontario portion of the tax rate.
  74. ali mansur from Etobicoke, Canada writes: PST currently only applies to goods. GST applies to goods and services.

    A harmonization of sales tax makes the PST apply on more items, but does not count toward an input tax credit. So, aside from taxing more things, you also end up taxing more things more than once.

    The point of the HST is to raise the provincial sales tax rate without people understanding that it is happening.

    Right-wing 'think-tanks' love this idea, because it means that there is more money to reduce corporate taxes. Governments love the idea because it raises more taxes, but the sticker price on many items doesn't change.

    THIS IS GARBAGE Make it stop!
  75. Ryan L from Canada writes: I love liberal haters, I remembered when they reduced GST and Mcguinty said he didn't want to harmonize for the same reasons of this article. All the cons were saying the similar insults towards mcguinty. Things never change everyone looks to hate on either side of the coin.

    Oh this is a tax increase if not properly distributed.

    Any one buy a used car? 10,000 car with an 8% exemption is 800 dollar savings.
  76. sam stone from Toronto from Canada writes: Peter Wojnar from Hamilton, Canada writes:

    >>Dan Shortt from Toronto, Canada writes: Seriously, the real problem, as many here are pointing out, is that harmonization will probably mean new Provincial Sales Taxes on items and services that were previously exempt from PSTs.

    True, but there are alternatives.

    People spend much more money on things other than just the Ontario PST exempt items.

    So harmonize and at the same time lower the Ontario portion of the tax rate.
    ===========================================
    You bought the dumbo liberal line. Did you believe muhlroney when he said the GST would be revenue neutral??? You don't buy hydro and natural gas? You don't use the internet. What about services like plowing, landscaping, painters, carpenters and so on. Here we go the brain washing begins and the dumbos follow the mcgoofy.
  77. sam stone from Toronto from Canada writes: Ryan L from Canada writesAny one buy a used car? 10,000 car with an 8% exemption is 800 dollar savings.
    ========================================
    What will happen Mr I don't know a thing about taxes, is MTO will collect the GST in addition to the PST. Currently, if you buy a used car from an individual, you pay only PST. This will bite hard.
  78. Dave Hodson from Newmarket, Canada writes: ali mansur from Etobicoke, Canada writes: PST currently only applies to goods. GST applies to goods and services.

    ali, while not as many as with GST, there are some services that are taxable for Ontario RST. But, I hear what you're trying to say.
  79. Peter Wojnar from Hamilton, Canada writes:

    >>sam stone from Toronto from Canada writes: You bought the dumbo liberal line. Did you believe muhlroney when he said the GST would be revenue neutral??? You don't buy hydro and natural gas? You don't use the internet. What about services like plowing, landscaping, painters, carpenters and so on. Here we go the brain washing begins and the dumbos follow the mcgoofy.

    Sam, if the harmonized PST ends up taxing more things but you reduce the rate, you can end up making it revenue neutral. The ultimate goal however for McGuinty should be to reduce Ontario taxes.

    The only difference will be the distribution. Some people will end up paying a little more, some a little less. It depends on your spending patterns.

    My only question is why are so many people worried about this when they thought the GST reduction of two points was senseless. It's like being on both sides of the issue.
  80. Richard Hawrelak from Sarnia, Canada writes: Dwight sticks his head out his cubicle and shouts to Dalton, 'Hey boss, is that 8 plus 7 or is it 8 plus 6?'
  81. sam stone from Toronto from Canada writes: Peter Wojnar from Hamilton, Canada writes: My only question is why are so many people worried about this when they thought the GST reduction of two points was senseless. It's like being on both sides of the issue.
    ========================================
    One was tax cut. Harmonization will be a huge tax grab. I am a commodity tax manager and I know a bit about the subject. Get ready to bend over when this goes through. Also, you believe that lying McGoofy will make this revenue neutral. This bozo has shown that he will lie and try to justify it later, He has to pay for his bloated gov and all the raises he is giving to the union members. Are you one of them?????
  82. CallofDuty . from Canada writes: McIdiot is going to sink SS Ontario with a Tax Torpedo.
  83. Peter Wojnar from Hamilton, Canada writes:

    >>sam stone from Toronto from Canada writes: One was tax cut. Harmonization will be a huge tax grab. I am a commodity tax manager and I know a bit about the subject. Get ready to bend over when this goes through. Also, you believe that lying McGoofy will make this revenue neutral. This bozo has shown that he will lie and try to justify it later, He has to pay for his bloated gov and all the raises he is giving to the union members. Are you one of them?????

    It will only end up that way if McGuinty makes it that way. And I do agree, he is a big taxer and big spender, so the risk is there.
  84. GK Cheese from Toronto, Canada writes: McGuinty to take second look at harmonizing sales tax, GST

    How about a second look on my market value assessment for property tax purposes also.
  85. Larry Norman from Nepean, Canada writes: I can't believe so many people, i.e., Alistair McLaughlin from Canada, want to pay the government more money under a harmonized tax system than they would have to under the present one for whatever reason. I am against paying one cent more than I do presently. Both federal and provincial governments suck way too much money out of me now. It may be problematic for business but not insurmountable.
  86. sam stone from Toronto from Canada writes: Larry Norman from Nepean, Canada writes: I can't believe so many people, i.e., Alistair McLaughlin from Canada, want to pay the government more money under a harmonized tax system than they would have to under the present one for whatever reason. I am against paying one cent more than I do presently. Both federal and provincial governments suck way too much money out of me now. It may be problematic for business but not insurmountable.
    ============================================
    I suspect Alistair McLaughlin resides in one of the maritime provinces and already pays the HST. Misery loves company.
  87. Dave C from Toronto, Canada writes: Anyone who isn't panicking over the loss a 'few exemptions' can go ahead and pay my share. Ontario PST is levied on goods. GST is levied on goods AND services. Assuming no decrease in the provincial rate, you're looking at an 8% tax increase on hydro, natural gas, heating oil, household services, construction, internet and telecommunication services, and so on. $250 extra a year on your home heating. An extra $10 every month on your cable/internet bill. A whopping $8000 to the government on a major $100,000 renovation. Looks like a tax grab to me, plain and simple.
  88. The Economist With Different Ideas from Canada writes: The people that say HST won't be an issue have forgotten one thing.
    There is no PST on Electricity but there is GST.
    Electricity should be tax exempt completely!
    It has become a necessity of life like Municipal Water.

    Stop Taxing Electricity and other necessities and I’m for it.
  89. Naomi Y from Canada writes: Alistair McLaughlin from Canada writes: It amazes me that people who sneeze at a 2% reduction in the GST will at the same time panic over the loss of a few PST exemptions.
    --------------------------
    People want the govt to reduce income tax before GST, how difficult is that to understand?

    PST does not tax most service. That's a not a 'few' exemption. Not to mention ppl don't like uncertainty and there's not much ppl here (if any) that really know how much more sales tax they gonna pay if they harmonize the tax.
  90. sam stone from Toronto from Canada writes: Dave C from Toronto, Canada writes: Anyone who isn't panicking over the loss a 'few exemptions' can go ahead and pay my share. Ontario PST is levied on goods. GST is levied on goods AND services. Assuming no decrease in the provincial rate, you're looking at an 8% tax increase on hydro, natural gas, heating oil, household services, construction, internet and telecommunication services, and so on. $250 extra a year on your home heating. An extra $10 every month on your cable/internet bill. A whopping $8000 to the government on a major $100,000 renovation. Looks like a tax grab to me, plain and simple.
    ================================================
    Don't forget the New House. That should help the weak real estate market. Pay double land transfer tax and now add PST. And I agree with you, how can people support this idea??
  91. Joe V from Canada writes: Great, more taxes. I guess the PST (Pig Sales Tax, named after our politicians) isn't turning in enough dough, so now they want the Greedy Pig Sales Tax to replace it.
  92. Brian Lee from Toronto, Canada writes: I'm not sure if everyone realize this but... the cost of Liquor is going up and he did introduce a health services tax a few years back on top of OHIP. And those are the ones you hear about on the news... so basically he's trimming in one place and adding it back on else where.
  93. GlynnMhor of Skywall from Canada writes: The Economist... writes: 'Stop Taxing Electricity and other necessities and I’m for it.'

    No, it's far more efficient to tax everything. The wider the tax net is cast, the lower the rate need be to generate the same revenue, and thus the lower is the distortion applied to the economy.
  94. prospector from blackfly country from Canada writes: Alistair McLaughlin from Canada writes: It amazes me that people who sneeze at a 2% reduction in the GST will at the same time panic over the loss of a few PST exemptions.
    ----------------------------------------------------------------------------------------

    Exactly.

    I'll be happy when Jean Cretien actually gets rid of the GST like HE promised.
  95. forty sum from Canada writes: It means the taxpayers (you and I) will pay more taxes and the corporations will not have to pay more taxes, it's a 100 million dollar tax break for the corporations, that's what Flaherty wants.
  96. Vern McPherson from Canada writes:
    sam stone isn't a tax accountant/ He's a backward pig farmer from Slurryville out in the boonies whose animals all committed suicide ... The article says this:

    '“We've consistently said Ontario would not agree to any proposal on harmonizing with the GST that would increase the tax burden on Ontario taxpayers, particularly on essential items such as home heating oil, children's clothing, books, and other items which are exempt from PST,”

    poor sammy can't read either. His memory is also f .......
    This GST PST harmonization scheme has been pushed by the fedCOns for the several years they have been around.
    Flakerty, sammy's hero, has been all over Ontario like a rash over this issue pushing Dalton to harmonize as a way to assist business.

    A phoney is a phoney I've always said.
  97. Vern McPherson from Canada writes:
    Harmonizew all you want Dalton.

    Just don't put the burden on individual taxpayers.

    If the feds will exempt or otherwise compensate Ontarians for any increase - go to er ..........
  98. Peter Wojnar from Hamilton, Canada writes:

    >>forty sum from Canada writes: It means the taxpayers (you and I) will pay more taxes and the corporations will not have to pay more taxes, it's a 100 million dollar tax break for the corporations, that's what Flaherty wants.

    If you think about it you would realize that corporations actually don't pay any tax at all. Taxes on corporations just get passed back to the consumer.

    If General Motors is selling cars and you put a big corporate tax on them, then one of two things will happen.

    One is GM will factor into the price of every car they sell the cost of their corporate taxes, just like they do with steel, electricity, labour, etc.

    Or two, if they find it difficult to put this cost into the price of their cars due to market competition, then they will either move operations to somewhere where they will pay lower taxes or shut down an assembly plant or office altogether. Either way, the consumer pays again, this time in the form of lost jobs.
  99. Peter Wojnar from Hamilton, Canada writes:

    >>GlynnMhor of Skywall from Canada writes: No, it's far more efficient to tax everything. The wider the tax net is cast, the lower the rate need be to generate the same revenue, and thus the lower is the distortion applied to the economy.

    GlynnMhor has a good point.

    It is more efficient to tax either everything or nothing. Once you start with exemptions for this and rebates for that the system gets too complicated and thus too costly to administer.

    It is also more fair. Take food for example. Basic groceries are not subject to GST/PST but restaurant food is subject to both. What if my job involves me being on the road all the time thus I can never eat at home and must always eat out. That means I pay PST/GST on all my food. That's just not fair.
  100. Doctor Beaker from Black Rock, Saint Lucia writes:
    Vern McPherson, the article has been re-written throughout the day -- you can't criticize someone for missing something that wasn't there when they read it.

    BTW, what exactly does harmonize mean? If Mr. McGuinty wants to 'harmonize' PST with GST, but he wants to retain the PST exemptions that now exist, is that considered harmonization? It sounds more like the status quo to me.
  101. Brian W. from Ontario from Canada writes: Sam Stone -- re: housing, GST (and a harmonized Fed-Prov HST) only taxes newly constructed houses, not existing houses. For new housing, I agree that tax could go up - even though there is PST on building materials, by taxing the full value of the house, the land and construction services also get included in the value for tax. However, the same issue arose when the GST was implemented and a new housing rebate was provided, broadly keeping the GST on new houses to the pre-existing level. This presumably could be done if Ontario harmonizes. There are already a number of services which are taxed under PST...telecom services, computer software, and household services (other than relating to housing/real property). Some posters indicated that the GST was a tax grab. In fact, in the last year of the former FST, it raised more money than the GST did when it was introduced in 1991, or in any of the next 4 years. So, it certainly was not a tax grab. What it does is that it takes tax off business inputs and it raises tax paid directly by consumers. However, certainly some of the tax paid by businesses now gets passed on to consumers through higher prices, so an HST in Ontario may not result in much more taxes being borne by consumers. Although a recession doesn't seem like a good time to harmonize - it would have one benefit -- it would be much more likely to result in tax savings from the removal of the PST being passed on to consumers, as businesses want to keep market share, prices down etc. Lastly, there are hardly any countries left in the world that still have a tax like the PST -- among industrialized countries, every one but the USA has implemented VAT's like the GST/HST. Most businesses in Ontario that have to deal with both GST and PST would find their lives are simpler if they do not have to deal with PST. We shall see -- I wouldn't be surprised if on Tues there will be an announcement on this.
  102. Freddie Fender from Canada writes: From the man who brought us the so-called 'Health Care Premium.'
    Honestly, this is not another tax!

    Anyone looking for a bridge?
  103. b W from Canada writes: Unfortunately, we have lived with an inefficient system requiring double filing with different rules. The government costs are excessive in that they are not coordinated and each one runs its own enforcement. The business costs are even higher.
    It is ridiculous when politics gets in the way of good business. Ontario was all for harmonization when the Federal government harmonized GST and PST in the Atlantic provinces. The problem was that the Federal government gave the Atlantic provinces $1 billion as compensation and Ontario said they would not harmonize unless they were also compensated. When the Federal government balked, harmonization did not proceed.
    So, I would say it is about time. I trust that Ontario will realize their administrative cost savings by eliminating their PST department without paying exorbitant notice and severance and pass these savings on to Ontarians through a reduction in the provincial rate. But, given that the government has been steadily growing both in numbers and in salary during the past eight years, well beyond thei realistic needs, I doubt this will occur.
  104. The Economist With Different Ideas from Canada writes: GlynnMhor of Skywall from Canada writes: The Economist... writes: 'Stop Taxing Electricity and other necessities and I’m for it.'

    No, it's far more efficient to tax everything. The wider the tax net is cast, the lower the rate need be to generate the same revenue, and thus the lower is the distortion applied to the economy.

    Gyynn, I'm for that but eliminate income tax. Tax should be based on consumption. It is only fair. Anyone which is everyone pays tax on what they consume. You commute you pay tax on the gas you buy. You eat, you pay tax on your quantity/quality of food. You flush you toilet you pay tax on the amount of water you use.
    Now that's different but I'm sure it would work. Everyone even the people on UI or pension will contribute based on their consumption.
    No exemptions or tax deductions, Period! Sorry about your bad investments, no deductions but because you invested or inherited well no tax on your income.
    This also means no income tax returns. No more deadbeat accounts at CRA. Sorry CRA you are out of work other than compiling your income.
    Too radical and too simple so it won't happen.
    Cheers
  105. Peter Kells from Bytown, Canada writes: Since I work in an industry where I do not charge Provincial sales tax to clients, all this means is that my customers will pay an additional 8% on every bill. As far as savings in administrative costs - in my case they are nil.
  106. Right Said Fred from Canada writes: Did I see on the list of things that Internet, electricity, gas for car, and nat gas for house would go on with harmonization?? That would mean we would pay more to fuel the car, heat and light the home and use the INTERNET! Not only that Rogers in their great yearly increase sent notice of increases coming Mar 1st, up to $10.00 more a month to watch tv and surf the net! We are all working for less and less! Oh don't forget about the municipal taxes that go up every year as well!
  107. GlynnMhor of Skywall from Canada writes: The Economist... writes: 'GlynnMhor: I'm for that but eliminate income tax.'

    Not that either. We need to tax as many different aspects of the economy as possible to ensure fairness. As matters stand many people get off paying no income tax at all, but if the system were simplified and set at a flat rate the same as the GST with both at 20%, the taxation burden will be spread widely but more gently.

    Any area of the economy that is taxed drives activity elsewhere, like a weight placed upon silly putty. Spread the weight and there's no other place for the economic activity to go, so the tax will distort less.

    If the income tax is flat rate, then we can also get rid of all the complicated nonsense of 'refundable tax credits' and 'non-refundable tax credits' and other excesses of bureaucratese.
  108. Mikey Dee from Canada writes: It is harmonized in Nfld and we paid on many more things.
  109. b W from Canada writes: Peter Wojnar from Hamilton writes: It is more efficient to tax either everything or nothing. Once you start with exemptions for this and rebates for that the system gets too complicated and thus too costly to administer.
    Well said. The exemptions are not only costly to administer, tehse exemptions are not truly exemptions.
    There are only a few truly exempt items (called zero rated), mainly drugs and exported goods as you can recover the GST you pay on expenses.
    Everything else on which GST is not charged are called exempt but are not. Take basic groceries. While hte grocer cannot charge GST on the selling price, the GST it pays on its costs (including transportation, rent, etc.), cannot be recovered and therefore becomes part of their costs which they must apss on to the consumer. Thus, GST is included int he selling price.
    It is all a game. The government loves special interest groups like the Canadian Citizens Coalition as they created the this 'exempt' category to respond to their complaints. These groups never looked at the truth behind the tax.
    So, get rid of the exemptions. Put everyone on equal footing and make everyone play by the rules. By exempting children's clothes, for example, you exempt everyone, rich or poor. By instead providing rebates for lower income people to compensate for the costs, you target those in need and not those who have no needs.
  110. The Economist With Different Ideas from Canada writes: GlynnMhor of Skywall from Canada writes: If the income tax is flat rate, then we can also get rid of all the complicated nonsense of 'refundable tax credits' and 'non-refundable tax credits' and other excesses of bureaucratese.

    I take it we agree then. I wrote a thesis on this. I hate to say it but it was closer to 30%. My prof said great work but you will never sell it.
    It is not hard to calculate and it might not be so bad now. Your 20% seems more appropriate today. He said, the problem is the people in zero tax brackets will revote and that is not politically correct. You get a 'D' but 'A' for inspiration and thinking outside of the box. I'll just harmonize that and give you a 'B'. LOL
    Needless to say I never made Finance Minister.
  111. David K from Guelph, Canada writes: BW wrote: (snipped) So, get rid of the exemptions. Put everyone on equal footing and make everyone play by the rules. By exempting children's clothes, for example, you exempt everyone, rich or poor. By instead providing rebates for lower income people to compensate for the costs, you target those in need and not those who have no needs.

    Small problem there. In order to institute rebates you need a bureaucracy. This takes time, people and money that could be better used on other things. If the rebates are to come via income tax, especially if the sadists who designed the current form are given the job, then it may involve record keeping and computation that might be beyond the skills of those who need the money most. There are more important things to tax than children's clothing. Your point of the costs being passed on is fair, witness the number of items that were supposed to be cheaper under the reduced GST and were never passed on. But this reinforces my point, once the bureaucrats get their sticky fingers on something change is going to work quickly against us and slowly, if at all, in our favour.
  112. ken hughes from Canada writes: Since when did the Chamber of Commerce take into consideration the purchasers. As a businessperson whose business is only required to charge GST, the comment that two systems being merged would save businesses in ontario 100 million is nothing but a joke. Any business that has such archaic systems that they cannot cost effectively calculate GST remittances should not be in business. I am already reducing my prices in these tough econimic times to help my customers. Am I now going to have to reduce prices by another 8 % to offset contibutions to the coffers of an ineptly run government. This will not stimulate the economy- directly. It will not increase income tax revenue for either government. But it will stimulate the grey economy- cash only- no PST, no GST. Further we also know that the GST is one of the most cost effective tax vehicles that the government has, simply because there is literally no administration, but on the other hand we also know it is one of the most abused tax refund programns going. Perfect time to entertain this nonsence. Lets put this into perspective. Harmonize and something that cost $1.05 with GST only is now going to cost $1.13. Aside for uncomprehending self-centered CEO's and Financial Firms who'w greed had caused the current economic crises- and got huge bonuses- very few people can afford an 8% cost increase. They will thus do without- a real stimulus to the economy
  113. Dan Shortt from Toronto, Canada writes: Tony . from Waterloo, Canada writes: 'Harmonizing the GST and PST makes EXTREMELY good sense for Ontario. It reduces costs for businesses and it reduces administrative costs for our government.'
    ---------------------------
    That is an absolute bogus argument. Complete hogwash.

    You know what would reduce admistration costs for the gov't and reduce costs for businesses? If we GOT RID OF THE PST altogether. Just thing of how much administrative costs for gov't and businesses could be reduced if we did that!

    But nobody is pushing for eliminating the PST altogether, are they? That's because the real motive for harmonization is NOT to save administrative costs.

    Rather, it's like ali mansur stated above: The point of the HST is to raise the provincial sales tax rate without people understanding that it is happening.
  114. Tony . from Waterloo, Canada writes:
    Whoa.. McGuinty ALMOST gets it... almost.

    Harmonizing the GST and PST makes EXTREMELY good sense for Ontario. It reduces costs for businesses and it reduces administrative costs for our government. Win-win. The extra revenue would be enough to eliminate the absolutely moronic health tax McGuinty levied (probably the worst designed tax in Canadian history, and that's saying something!), which in turn would reduce government overhead even more while putting money back into the pockets of consumers. So win-win-win.

    Unfortunately McGuinty isn't quite there. The article is actually totally wrong, McGuinty is 100% AGAINST harmonizing the PST with the GST, what he wants Ottawa to do is harmonize the GST with the Ontario PST, something that makes absolutely no sense at all.

    McGuinty, the answer is dead simple
    - Harmonize PST with the GST
    - No special exceptions, HST to be charged on ALL items GST is charged on. ALL of them!
    - NO SPECIAL EXCEPTIONS!!!! (I'm saying it twice because McGuinty isn't very intelligent and probably missed it the first time)
    - No special 'extra' taxes to try and nickel and dime things that might see a drop in tax rates (ie liquor)
    - NO SPECIAL EXCEPTIONS!
    - Eliminate the ridiculous 'Health Premium' that is horribly implemented and NEVER had anything to do with health care
    - Ohh, and in case you missed it above, NO SPECIAL EXCEPTIONS!
  115. Lee D from Canada writes: The comments by Tony from London are right on the money. Harmonization of provincial sales taxes and the federal GST save businesses money by reducing the costs of compliance (filing out government forms, keeping track of government trust funds, etc, etc)and the federal/provincial governments save money by eliminating duplication of government services, i.e. you can reduce the number of sales tax auditors, collectors, managers, administrative staff, accomodation costs, etc, etc. Three of the four Maritime provinces harmonized their provincial sales taxes back in the 1990s and it is just a matter of time before the other provinces are forced financially to harmonize as well. Provincial and federal government departments generally are reluctant to transfer responsibility for any government services to one another because of 'turf protection', empire building, etc, etc. It's outside agencies like the Chamber of Commerce and the taxpaying public that generally force governments to become more cost effective and efficient.
  116. Vote NDP in the next federal/ provincial election from Toronto, Canada writes: Instead of focusing on harmonized sales taxes which clearly benefits NO ONE, we should be focusing on eliminating sales taxes on family essentials such as diapers, children's clothing, school supplies, medications etc..... This will help working families a lot. The federal NDP proposed this in the 2004 election but I guess voters were clueless in figuring this out hence giving the Liberals another mandate.
  117. Dan Shortt from Toronto, Canada writes: Lee D from Canada writes: 'Harmonization of provincial sales taxes and the federal GST save businesses money by reducing the costs of compliance'
    -------------------------
    And the elimination of provincial sales taxes would also sae businesses money by reducing the costs of compliance.

    There would be a lot less forms to fill out, and money could also be saved by elimination of duplicate gov't services. By eliminating the PST, we could reduce the number of tax auditors, collectors and managers on the gov't payroll ... Just think of the costs savings!
  118. Canadian First from St. Catharines, Canada writes: $100 million savings to business. Some would have you believe this savings will be passed on to the consumer or will encourage employers to hire more people. The only thing this measure will do is cost us more, and pad the bottom line of businesses. There are no advantages whatsoever to the consumer, who once again stands to get shafted by this er, 'untruthful' Premier.
  119. A. Commentator from Toronto, Canada writes: For small businesses who provide services only, the change to an HST will actually complicate things. Right now, I only charge 5% GST. An HST will drive up the costs of my services (website design) considerably. I am not sure how this would work, but would I need to charge the HST to out-of-province clients? If so, my services will become less competitive vs. those offered from other provinces without an HST.

    So, for those who say that the HST is good for businesses, it really depends just what kind of business. For a very small service-based business like my own, this would not be good at all!
  120. Vern McPherson from Canada writes:
    It is also more fair. Take food for example. Basic groceries are not subject to GST/PST but restaurant food is subject to both. What if my job involves me being on the road all the time thus I can never eat at home and must always eat out. That means I pay PST/GST on all my food. That's just not fair.
    Posted 23/01/09 at 6:02 PM EST | Alert an Editor | Link to Comment

    ==========================

    Travelling expenses are deductible....
  121. Ryan Lemay from Canada writes: Minimizing overlap and creating a more efficient Gov't is the surest way to creating a competative Economy. And a guy coming from the East talking about efficiency, geeze the world is surely upside down!!!
  122. Brian W. from Ontario from Toronto, Canada writes: To a Commentator - I don't think that's true at all. If the location of your small business is in Ontario, and you provide services to a business in a non-harmonized province such as Manitoba, as long as you perform a minimal amount of services in your province, you would charge the tax rate applicable to Ontario. So it is likely that all your services would be taxed at the same rate. Only under exceptional circumstances does a service provider in a province have to charge a tax rate other than that applicable to his own province. Keep in mind that your clients are businesses that can claim the credit for whatever tax rate you charge, so it isn't a cost to them. In addition, currently you have to bear PST on a broad range of business purchases you make (telecom, software, repairs, etc) and you don't get credits for any of that now.
  123. K D from Canada writes:
    Think of the cash grab from Tim Horton coffees alone for Mr. McGuinty.

    Cha Ching$$$$$$$$$$$$$$$$$$$$
  124. Peter Wojnar from Hamilton, Canada writes:

    >>Right Said Fred from Canada writes: Did I see on the list of things that Internet, electricity, gas for car, and nat gas for house would go on with harmonization?? That would mean we would pay more to fuel the car, heat and light the home and use the INTERNET!

    As far as gas goes, this is something that would need to be looked at if the taxes were harmonized.

    Ontario currently charges 14.3 cents per litre tax on gasoline. If the PST were harmonized, this existing tax could be reduced, or better yet eliminated. One less tax, replaced by a single broad based tax.
  125. m y from Canada writes: this is the easiest way to increase taxes.

    and no change in tax credits.

    if you get any tax benefit next week - save it all, don't spend it because you know taxes are going to go up afterwards.

    this gov't isn't losing a dime....look at gas prices....up they go, so do tax revenues.
  126. Allan Ross from Toronto, Canada writes: I'm so happy that the Ontario Chamber of Commerce thinks this will save business $100 million. Did they bothering thinking about the consumers who are customers of these businesses who will now have less money to spend? Help business, screw the public.

    And Dalton - don't float a trial balloon unless you're prepared to tell us how this would help everyone.
  127. Peter Wojnar from Hamilton, Canada writes:

    Many people have concluded that harmonization means an extra 8% tax on things that are currently not subject to PST.

    That's not necessarily true.

    Since more things will be subject to the PST portion perhaps the PST rate can be reduced to 5% and still be revenue neutral. And of course, Ontario should look at reducing spending so that the rate could be cut even further.

    If McGuinty thinks harmonization means keeping the Ontario rate at 8% while taxing more things, then screw him. That's reason not to do it.
  128. Art Vandelai from Burlington, Canada writes: This could have a big financial impact on many Canadians, even those who do not live in Ontario.

    For example, most mutual fund managers practice their trade in Toronto. GST is charged on their services. At present, PST is not.

    Per the Investment Funds Institute of Canada, $507 billion in assets are invested in Canadian mutual funds.

    Management fees that we pay to manage these assets generally range from 1 to 2% per year. That's about $7.5 billion worth of taxable revenue each year for the industry.

    Therefore, the Ontario government will be taking from $375 million to $600 million each year right out of Canadians' already depleted retirement savings if this so-called harmonization takes place.

    Unless of course, the investment management industry decides to leave Ontario.

    Bay Street will certainly not let this harmonization happen without a big fight.
  129. David Robertson from Vancouver Toronto, Canada writes: This is the smartest tax policy decision to come out of the McGuinty government since it was first elected. Ontario PST increases the cost of Canadian exports right at a time when we need to be the most competitive in the global market place. PST provides a disincentive to businesses to invest in technology to improve productivity. Furthermore, harmonization provides tax fairness for all individuals. Example: Children's clothing is exempt from PST but not GST. Those with simplistic views would say 'then GST is bad'. Wrong. Exempting children's clothing means that a single mother does not pay PST on the clothing she buys for her children at Walmart, but it also means that the Rosedale Matron who buys her children $500 jeans at Holt Renfrew also does not pay PST. Under the GST system, both pay GST on their children's clothing, but the single mother receives a refund of the GST she pays through the low income GST credit. Harmonization eliminates duplication. Currently, the feds incur the cost of the CRA administering the GST and Ontario taxpayers incur the cost of the Ontario Ministry of Revenue administering the PST system. With harmonization, one tax; one administration. Furthermore, Ontario businesses currently file two tax returns -- GST with the feds and PST with the province. With harmonization, they file one. Harmonization make Ontario a much more competitive place to do business than the United States. Ontario is only 1 of 5 jurisdictions in the entire OECD that impose both a VAT (i.e. GST) and a sales and use tax (i.e. PST). The other four are BC, Sask, Manitoba, and PEI. Why, when we are only 30 million people trying to compete with a neighbour to the south of 330 million do our governments insist on doubling the burden on us? Sales tax harmonization eliminates this duplication. I encourage all of you -- for the good of yourself, your neighbours, your province, and your country -- support this initiative! For once, say 'YES WE CAN!'
  130. Fake Name from Canada writes: Sounds smart to me; there's no point paying to administer a redundant sales tax.
  131. Todd Harvey from Canada writes: The issue with this is who wants to add another 8% to maintaining the status qou. The last time I checked GST is charged on gas and hydro. In a tough economic enviroment you have to wonder who really wants or can handle a automatic 8% increase. I'm also fairly sure that you would also be paying a automatic 8% increase for cable, internet, cellphones and homephones.
    This sounds like a balant tax grab to me.
  132. J Kay from Canada writes: For those decrying McGuinty for not having done this sooner a little historical refresher is in order. It was the Harris government that rejected the harmonization of the GST and PST provincially, NOT McGuinty. True McGuinty didn't bother to do so either and like Harris has almost certainly maintained it as separate recently due to a Conservative government in Ottawa and to avoid any issues of being tied to the GST.

    That all said, it was Harris who rejected Harmonization for Ontario when the Liberal government under Chretien proposed it - in the Redbook in 1993 - to deal with some of the failings of the GST that had been introduced by Michael Wilson. Wilson also wanted harmonization back then but it was felt the provinces would be remiss to give up provincial 'jurisdiction' and allow the feds to handle it.

    Back in 1994 when the Liberals took power and began looking at alternatives to the GST, including simply harmonizing it with the province' s PSTs as the Redbook promise stated - the same one so many people are misinformed about - the Bob Rae government in Ontario had indicated they would support harmonization but the Rae government went down to defeat and the Harris government rejected the idea.

    So it is completely ignorant to blame the current lack of harmonization solely on McGuinty. And yes it makes far far more sense to harmonize it s the plethora of analysis done in 1994 showed. It would be nice to see 0.5%-1% shaved off the combined rate but he improvement to business and government effiiency surely warrants doing so.
  133. Norm Jom from Petawawa, Canada writes: Some here obviously don't understand how provincial sales taxes work or what it's effect on Ontario consumers will be. Not surprising as some of the posters in favour of this move don't even reside in Ontario. Many seem to forget, or weren't alive, when the federal govenment was not in the sales tax game, it used to be provincial government's method of collecting taxes. In any case, for people like myself in a very low income bracket, this will be disasterous. I am on a fixed disability income of less than 1,000 a month. If the harmonization goes through I will be paying additional taxes on such necessities as electricity, clothing, and services. For those of us who every single dollar does matter, it will have a very undesirable consequence. Those commercials where you see a person making a choice between food and rent or electricity or rent, are a sad reality for many in Ontario. An 8% increase in taxes, heck even a 1% increase, has an effect. I'm happy for those of you who apparently can afford whatever consumption taxes are proposed, but for so many of us it means making choices that could be between putting food on the table and paying our rent. As for the numpty talking about GST rebates, they barely cover anything and will not change if the taxes are harmonized. We'll still be paying out of pocket more than what we did before.
  134. J Kay from Canada writes: Norm Jom: Your comment seems a bit misguided. I think most people herein are quite familiar with sales taxes seeing as all provinces have them, save Alberta. Moreover I suspect that many herein actually have experience with the harmonization of the GST and their local PST, something I suspect you lack, in a personal, visceral way.

    It is not like there is something overly unique about Ontario's PST such that others cant fathom the impact; that as best as I can assess, not having read all of the comments, has been addressed above. In fact many have experienced the impact of the switch already, something Ontarians have not.

    To address your concerns, I believe the government could/should lower the PST rate such that the impact on individual Ontarians is largely neutral. Yes some thing will have an additional X% tax applied to them, but if the wide swath of goods sees a reduction in taxation to counteract it, then no harm has been done.
  135. b W from Canada writes: First, my business would direvtly suffer because I am a tax consultant in Ontario yet I wholeheartedly support this idea and hte idea of eliminating the exemptions because it makes good economic sense.
    Most who reject the idea of the harmonization are scared of businesses and governments keeping the additional money. To me, this is a very shortsighted and egocentric thing, keep high levels of bureaucracy and ineffciency because we cannot trust our elected officials or the ompanies from which we buy our goods.
    First, elect a government you can trust. Get out there and make your concerns heard instead of just sitting back and bemoaning your fate. If your are not part of hte solution...
    Second, exercise your right of free will and buy from companies who pass along the savings.
    But, don't be so scared of your shadow and conspiracy theories that you would choose to perpetuate archaic and anti-business taxes that drive away businesses.
    Are you the same people who believe the auto bailout is right? If yes, then create a more business friendly environment in Ontario so that we attract alternative businesses. Give the government the money to find the baiolout instead of creating huge deficits, And harmonize your own thoughts before rejecting valid ideas.
  136. Norm Jom from Petawawa, Canada writes: J Kay from Canada writes: Norm Jom: Your comment seems a bit misguided. I think most people herein are quite familiar with sales taxes seeing as all provinces have them, save Alberta. Moreover I suspect that many herein actually have experience with the harmonization of the GST and their local PST, something I suspect you lack, in a personal, visceral way. ------------------------------ I was very clear to say 'some' posters and it very very clear that some posters don't get it at all. I agree that most posters do get it. Sadly you've concluded incorrectly that I lack knowledge as a result of this statement. You're quite wrong, I have lived in provinces with and without harmonized taxes. There is nothing in the article stating there will be a reduction in the rate. However, I was quite specific when I commented on vital goods and services, eg electricity, that would be effected. The reason many goods and services in Ontario are exempt from provincial sales taxes, is because they are vital services and would adversly effect low income Ontarians. 'No harm done indeed', it's you that is missing my point entirely. I couldn't care less about high priced goods, or goods purchased with discretional income, it's necesities that drive me. On my income I cannot afford excesses, I also cannot afford additional taxes on things I need to just survive. It doesn't not balance out as you seem to be suggesting.
  137. Edward Carson from Canada writes: The business I am in doesn't pay PST on goods purchased or charge PST on services provided...I wonder how Dalton will fix that if he harmonises the taxes.
    And its funny that he's willing to put all his effort here and turn his back on York.
  138. J Kay from Canada writes: Norm Jom: Well Norm I did say I suspect, implying that I clearly wasn't certain. That said, your use of some, even as a qualifier, I would argue goes too far. At best it's few but I digress since it's neither here nor there and is simply a matter of degree.

    For someone like you who is on a fixed income and perhaps primarily or maybe even solely consumes goods which are currently PST exempt, then yes this would impact you even if there was a rate reduction. I didn't suggest - if you've read my writings on any such topics you would be aware - that these things would have universal and completely uniform effects on individual Ontarians budgets. Some might benefit, some might hurt, only on average could one modify the rate to make it revenue neutral.

    That said there are significant efficiency gains to be had in doing this and those gains can provide a lower cost of business to the provincial government, either perhaps down the road allowing for lower taxation or the money being used elsewhere on more useful program spending. Similarly the cost reductions for business will either result in an improvement in the profitability levels of the companies, which also benefits people through dividends in said companies or through lower costs on those same goods.

    So I ask you should good policy be avoided, policy which streamlines business and government be avoided if a somewhat small segment of the populous is negatively effected?
  139. Geordie Lad from Canada writes: Harmonizing makes sense.

    Would the neocons who keep moaning about the current Ontario government please desist. The level of political harmony in Ontario now is much higher than under the Harris regime and his retreads who followed Harper to Ottawa.
  140. sam stone from Toronto from Canada writes: Brian W. from Ontario from Canada writes: Sam Stone -- re: housing, GST (and a harmonized Fed-Prov HST) only taxes newly constructed houses, not existing houses. For new housing, I agree that tax could go up - even though there is PST on building materials, by taxing the full value of the house, the land and construction services also get included in the value for tax. However, the same issue arose when the GST was implemented and a new housing rebate was provided, broadly keeping the GST on new houses to the pre-existing level.
    ====================================
    As soon as the new house is worth more than $450,000, there is NO GST rebate. This is a tax grab.
  141. sam stone from Toronto from Canada writes: Vern McPherson from Canada writes:
    sam stone isn't a tax accountant/ He's a backward pig farmer from Slurryville out in the boonies whose animals all committed suicide ... The article says this:

    '“We've consistently said Ontario would not agree to any proposal on harmonizing with the GST that would increase the tax burden on Ontario taxpayers, particularly on essential items such as home heating oil, children's clothing, books, and other items which are exempt from PST,”

    poor sammy can't read either. His memory is also f .......
    This GST PST harmonization scheme has been pushed by the fedCOns for the several years they have been around.
    Flakerty, sammy's hero, has been all over Ontario like a rash over this issue pushing Dalton to harmonize as a way to assist business.

    A phoney is a phoney I've always said.
    ============================================
    As I have stated many times. Vern A.K.A. Mike Sty is a no nothing loser that lets out after having a few gulps of his home made moonshine. Mommy upstairs may also be a factor in you rages. I
  142. Norm Jom from Petawawa, Canada writes: J Kay from Canada writes:So I ask you should good policy be avoided, policy which streamlines business and government be avoided if a somewhat small segment of the populous is negatively effected?

    --------------------------

    That somewhat small segment of the population just happens to be the poorest segment and generally those on fixed incomes. So yes it should be avoided.
  143. sam stone from Toronto from Canada writes: J Kay from Canada writes: So I ask you should good policy be avoided, policy which streamlines business and government be avoided if a somewhat small segment of the populous is negatively effected?
    ======================================
    This is NOT agood policy. Anyone that CANNOT see that this is coming up because McGoofy has spent too much and needs another cash cow, has their heads up their butt. The GST was NOT revenue neutral and this won't be either. Also, Quebec does NOT have a harmonized tax. The QST is 7.5% and it is charged on top of the GST. The Quebec gov also administers both taxes. The amount of items that will be affected is huge. The so called small segment of populous is the businesses that are pushing for this. Between the two evils, status quo is far better. From reading the posts, very few people have a god understanding of PST. Even accountants don't understand PST GST unless that is there specialty. Again, this will bite!!!!
  144. Bill Hopkins from London, Canada writes: You know it will mean that we will all be paying more tax on the items that are probincially exempt -- and there will be no reductions or compensations elsewhere.

    And as far as the 'health care premium' -- it fits all the definitions of an income tax. If you earn more, you pay more, and it goes into the general fund. Period.

    I repeat a quotation that I put on a different thread yesterday --' A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money.' (G. Gordon Liddy)
  145. D Roberts from Canada writes: McGuinty needs more to pay his gov't worker union pals. He's dishing out 13% raises. He needs the cash, and you the taxpayer have it. Or do we? Actually, I guess he's now borrowing on your behalf to pay back is friends.
  146. Fred Bray from Leamington, Ontario, Canada writes: Some say big deal, well it is because on heating and electricty it wiil mean about another $300 per year on your payments.

    With a lot of people on fixed incomes and below the proverty line in this province this is a lot of money for them to pay on eccentials which should not have been taxed in the first place
  147. Fred Bray from Leamington, Ontario, Canada writes: OH! WHO EVER HEARD OF A GOVERNMENT AGENCY BECOMING MORE EFFICIENT ????????
  148. Fred Bray from Leamington, Ontario, Canada writes: With the popularity on par with George Bush this could be the last knife in the back of the people of Ontario before he gets booted out of office.
  149. sam stone from Toronto from Canada writes: For those that have not seen above, This is a repeat Post. If McHuinty likes this, it is because it will fill his coffers with tons of new tax. Here is a list of items that will become taxable under McGoofy's new scheme: New House (currently only the material is taxable not the labour), land, legal fees, real estate commissions, prepared meals under $4.00 (yes that includes your Timmy coffee), hair cuts, installation labour for real property, VITAMINS, books, hydro, natural gas, internet services, accounting fees, mortgage discharge fees as well as bank charges, carpenters, plumbers, snow plowing, and the list goes on. Please don't believe the IDIOTS that say the rate will be reduced to equalize the burden!!! Do really think that lying piece of crap mcgoofy will exempt all those things?????. The Revenue department has exploded even after all th ecorp tax auditors merged with feds. This idiot will spend untill he thrown out. Any accountant that has worked with ontario revenue can verify this.
  150. Hopelessly Hoping from Kingston, Canada writes: Did the rates go down inPEI, QC, and NS when they harmonized their taxes? How were people on fixed incomes affected?
  151. Ray 61 from Sault Ste. Marie, Canada writes: Surely everyone in Canada above the age of twelve realizes that the tax rates in Canada already perhaps the highest in the world will continue to increase with no upward parameter in view. Ultimate communism in the making.
  152. Mark Tilley from Brampton, Canada writes:

    David Harrison from Canada writes: This is a terrific idea and will simplify things for businesses. It's not so much the calculation of the tax by the cash register but the back-end administration work of dealing with two sales tax mechanisms and authorities.

    Obviously, there would need to be a rate reduction to compensate for the loss of the exemptions. Something like a combined 10% rate sounds about right, and it would have the benefit of making manual tax calculations trivial.

    ----

    Absolutely right on all counts!

    Further, removing the PST will make business more competitive (only direct mfg inputs are exempt from PST).

    This is something that should have been implemented over 10 years ago.

    Get it done already, and make sure that the GST rules apply as is without monkeying around with them. A 'made-in-Ontario' harmonization as advocated by some groups would waste away the simplifying advantage gained by harmonization in the first place. Stupid idea, that.
  153. Dave C from Toronto, Canada writes: There are some benefits to be had if a reduction to the provincial rate is carefully calculated such that harmonization is revenue-neutral to the widest possible swath of th Ontario population. HOWEVER, let's be realistic here. Do we really expect the Mcguinty liberals to calculate and lower the PST like this? At best, one percent or less as an appeasement, at worst, the rate doesn't change because 'the economic situation means that the government is already strained to provide services based on current revenue'.

    By the way, my business is professional services for internet retailers, and I work daily with systems that handle HUNDREDS, if not THOUSANDS of individual taxes with unique rules, geographic ranges and rates. Now that is a burden. If your enterprise is having trouble with the collection and disbursement of just GST and PST to two government agencies, you really don't deserve to be in business these days.
  154. David Robertson from Toronto, Canada writes: Mr. Stone - Please check your facts.
    The GST was, in fact, revenue neutral when it was brought in in 1991. It replaced the Manufacturers' Sales Tax, and in fact, the switch from FST to the GST actually reduced the federal government's sales tax revenues.
    If you would like to (a) learn what the differences are between GST (a valued added tax) and PST (a sales & use tax), and (b) the impact harmonization had on Nfld, NS, and NB, I'd encourage your read the following paper.
    http://www.fasken.com/files/Publication/8d5d43d3-499c-41f2-b4dc-cc7e6a06b9af/Presentation/PublicationAttachment/51ced119-7ef7-46a3-89eb-7af6a930b0fd/SALESTAXHARMONIZATION.PDF
  155. W M from Canada writes: Finally! This is too important (and too obviously logical) to let it fail over political gamesmanship (again!). If only Flaherty had felt that way when he was Ontario's Minister of Finance, it could already have been done many years ago. I.e., McGuinty shouldn't worry about the possibility that this might make Flaherty look good. It's way too late for that.
  156. sam stone from Toronto from Canada writes: David Robertson from Toronto, Canada writes: Mr. Stone - Please check your facts. The GST was, in fact, revenue neutral when it was brought in in 1991. It replaced the Manufacturers' Sales Tax, and in fact, the switch from FST to the GST actually reduced the federal government's sales tax revenues. If you would like to (a) learn what the differences are between GST (a valued added tax) and PST (a sales & use tax), and (b) the impact harmonization had on Nfld, NS, and NB, I'd encourage your read the following paper. ================================== You may need a little memory refresher. The GST turned out to be a huge cash cow and took in billions over projection. The FST which at the time was 13.5% was applied at the wholesale. There was widespread abuse in people using exemption certificates illegally. The PST is applied at the retail level and the tax base will be braoder. I have years of experience in commodity taxes and many of them in the retail industry. Save your condesending remarks for you libby friends as this is a crock. LOOK AT TIMING FOLKS. This is coming at a time when McGoofy needs cash. And, you cannot compare the maritimes with Ontario. Their economy is much smaller and the joint services may make sense. Also, explain to me why Ministry of Revenue needs FIVE assistant deputy ministers NOW. Before corporation tax was merged with the feds, there was ONE Assistant Deputy minister. It is because this IDIOT of a premiere is spending our money and could care less about average tax payer.
  157. W M from Canada writes: It would be funny (if it weren't so tragic) to read the posts of people who usually decry government inefficiency suddenly writing passionately in favour of preserving the status quo, i.e., two completely duplicated bureaucracies collecting two nearly identical taxes and the necessity for businesses to keep two completely separate sets of accounts in order to file them. Worse, the tax they are arguing in favour of preserving (the PST) is acknowledged by virtually every economist in the world from right to left as inferior to a value added tax (like the GST). I get the feeling that if they gave McGuinty a wish list and he agreed to implement, they would suddenly turn around and attack him for it. Take off the blinkers!

    BTW, does this mean that you all now think Flaherty has it all wrong? Because I would agree that his and Harper's performance as fiscal managers has been horrendously bad to date (blowing the deficit on politically cynical, rather than economically smart tax cuts, trying to buy provincial votes with gigantic transfers, etc); but in this case he is right. Ideally, he would have acknowledged that this was good policy and implemented it back when he was Ontario's finance minister (instead of playing politics); but better late than never!
  158. sam stone from Toronto from Canada writes: W M from Canada writes: BTW, does this mean that you all now think Flaherty has it all wrong? Because I would agree that his and Harper's performance as fiscal managers has been horrendously bad to date (blowing the deficit on politically cynical, rather than economically smart tax cuts, trying to buy provincial votes with gigantic transfers, etc); but in this case he is right. Ideally, he would have acknowledged that this was good policy and implemented it back when he was Ontario's finance minister (instead of playing politics); but better late than never! ====================================== Little memory refresher. When Flaherty was in charge here in Ontario, he stated that he would not harmonize the PST because it would amount to a tax hike. Eves & co were also about to introduce an Ontario administered personal incom tax. Instead, they lost the election and mcgoofy just implemented the don't call it a tax health premium. Four years ago there was only Ministry of Finance. Now it is divided into 2 ministries. Revenue and Finance. Why does revenue have more employees now after the feds took all the corp tax employees????? Why are there 5 assistant deputy ministers making $175,000 each when before there was one. Why does revenue need its own Deputy Minister making over $200,000. You call this streamlining. This happened after the feds aand prov merged corporations tax. This scheme should fool only the super DUMB. I am surprised at people of normal intelligence falling for this scheme. Look at salary disclosure at the number of people in Revenue making over 100K. 60% of positions didn't exist before STREAMLINING!!!!!!
  159. Dan Shortt from Toronto, Canada writes: J Kay from Canada writes: 'I didn't suggest ... that these things would have universal and completely uniform effects on individual Ontarians budgets. Some might benefit, some might hurt, only on average could one modify the rate to make it revenue neutral.'
    ------------------
    Lets get real. Who exactly is going to 'benefit' from adding PST to hydro bills, telephone bills, children's clothing, etc.? Certainly not the consumer, i.e. the 'tax-payer.' It's the government who is going to benefit - and nobody else!

    In this time of economic crisis, with general consumers needing to tighten their belts and reduce household spending due to decreased levels of disposable income, NEW taxes on necessities like hydro, heating fuel, medical items, etc. are NOT appreciated.

    We know the gov't is going to be seeing reduced tax revenue due to reduced consumer spending, reduced incomes, etc. That's no reason to try to gouge the consumer by a stealthy tax increase!
  160. Scott Luft from Canada writes: The federal and provincial taxpayers have already been harmonized!
    Doesn't it seem a little silly to question the affects on hydro bills less that 3 months after a 12% hike in electricity rates. I'm sure even here in Ontario people could figure out how to compensate for the impact in the tax change.
    Just kidding. I don't really think that could be figured out in Ontario.
    From our brighter days, the concept of exempting services is what is needed from a number of standpoints, especially environmental (encouraging maintenance over consumption). But that could be figured out after harmonization.
    Feels good to finally have a positive reaction to a statement from our premier.
  161. Ron Preston from Belle River, Canada writes: Put your hands on your wallets we are going to be taxed more for items both tax were not imposed.It's the Liberal way.
  162. GlynnMhor of Skywall from Canada writes: The Economist... writes: 'GlynnMhor: I wrote a thesis on this. I hate to say it but it was closer to 30%.'

    I'm assuming you mean it would take a 30% flat tax to replace the revenue from the current complicated tax. That may be, but raising the consumption tax to 20% would add considerable revenue as well.

    In any case the exact value is of less importance than the simplification of the whole system and the reduction of incentives to evade taxes. When you are taxed at marginal rates hovering around 50%, there is considerable incentive to hire expensive tax lawyers and accountants to wiggle your way out of it.
  163. GlynnMhor of Skywall from Canada writes: Meanwhile, the growth of companies like H&R Block and the other 'tax refund today' companies stems in large measure from the fact that even people who are both literate and numerate have difficulty following tax laws and completing tax forms optimally.

    I remember when I first started paying taxes, if another T4 floated in from some weekend job I had done while a student, I'd just add the various numbers from the boxes and look up the new final figure in the tax table. Nowadays, I'd have to start the whole process from the beginning, since various categories of income have cascading effects in defferent parts of the calculation.

    What you actually earned in the year is different from your 'gross income', which is different again from 'net income', and from 'taxable income', and then there's 'earned income'.
  164. W M from Canada writes: Sam Stone, seem to think that you are correcting me by pointing out that as finance minister of Ontario Flaherty said that he wouldn't harmonize the GST, because it was a 'tax hike' and yet, that is precisely my point. Now the very same Jim Flaherty is agressively promoting harmonization of the GST and PST.

    I happen to think that Flaherty was playing games the last time, since he is certainly smart enough to have known that if he didn't want to increase the total take, all he had to do was reduce the rate of the tax (I hope you will agree that this is not exactly rocket science).

    Now he is saying that it harmonization is definitely the right thing to do. Do you think he is wrong / misleading voters today or that he was wrong / misleading them when he was finance minister of Ontario? I happen to think that he has got it right this time around. It's a rare occurence, but I'll take it.
  165. W M from Canada writes: sam stone from Toronto from Canada writes: 'Little memory refresher. When Flaherty was in charge here in Ontario, he stated that he would not harmonize the PST because it would amount to a tax hike. Eves & co were also about to introduce an Ontario administered personal incom tax. Instead, they lost the election and mcgoofy just implemented the don't call it a tax health premium. Four years ago there was only Ministry of Finance. Now it is divided into 2 ministries. Revenue and Finance. Why does revenue have more employees now after the feds took all the corp tax employees????? Why are there 5 assistant deputy ministers making $175,000 each when before there was one. Why does revenue need its own Deputy Minister making over $200,000. You call this streamlining. This happened after the feds aand prov merged corporations tax. This scheme should fool only the super DUMB. I am surprised at people of normal intelligence falling for this scheme. Look at salary disclosure at the number of people in Revenue making over 100K. 60% of positions didn't exist before STREAMLINING!!!!!!'

    ==============================================

    Sam, further to my last message, you seemed to be suggesting that Flaherty was justified in not harmonizing the GST because he was going to reform the income tax. Is that really what you are saying? And, if so, please explain why you think that it could only make sense to do one or the other and not both? You see, I may be dumb, but if harmonization is the right thing to do (as Mr. Flaherty now says it is), then why would the manner in which provincial income tax is collected possibly change that?

    And, are you really saying that we shouldn't take action that could increase the efficiency of public administration, because it is really a scheme for increasing wages? If so, are you saying that Flaherty couldn't have harmonized the tax without turning it into a scheme to increase wages? Is he really that weak / 'dumb'?

  166. Peter Wojnar from Hamilton, Canada writes:

    >>Fred Bray from Leamington, Ontario, Canada writes: OH! WHO EVER HEARD OF A GOVERNMENT AGENCY BECOMING MORE EFFICIENT ????????

    There is one sure fire way to make a government agency more efficient.

    Eliminate it.
  167. Sue G. from Canada writes: Provincial and many TO's ( municipal) residents are often calling for less gov't waste and bureaucracy.......an opportunity - get it done.
  168. sam stone from Toronto from Canada writes: W M from Canada writes: Sam, further to my last message, you seemed to be suggesting that Flaherty was justified in not harmonizing the GST because he was going to reform the income tax. Is that really what you are saying? And, if so, please explain why you think that it could only make sense to do one or the other and not both? You see, I may be dumb, but if harmonization is the right thing to do (as Mr. Flaherty now says it is), then why would the manner in which provincial income tax is collected possibly change that? And, are you really saying that we shouldn't take action that could increase the efficiency of public administration, because it is really a scheme for increasing wages? If so, are you saying that Flaherty couldn't have harmonized the tax without turning it into a scheme to increase wages? Is he really that weak / 'dumb'? ======================================== You did not answer the questions regarding the number of staff Ministry of Revenue has NOW after the provincial corp tax auditors went to the Feds!!! My point is simple. This simpleton of premiere is looking for a broader tax base and will not streamline anything. He will continue inflate the civil service and grab more taxes in the process. Also, my previous post dealt with TWO issues, 1) Personal income tax and 2) PST. Flaherty did not want to harmonize the PST when he finance minister of Ontario. He wanted Ontario to administer its personal income tax program. This is contradiction to his view today as Canada's finance Minister. Although, I am a conservative, I find Flaherty hard to take. This guy lies and flip flops as much or ore than McGuinty. In theory, this is good. In practice, the consumer will get hosed.
  169. INTERNET DEBATING LOL from Toronto, Canada writes: taxes you say?

    YES WE CAN!
  170. rick from river city from Canada writes: Drooling Dalton... days late and dollars short.
  171. LLoyd Atkinson from Winnipeg, Canada writes: I hope someone will do a clear chart showing the pain harmonization will mean for the average person. I notice here in Manitoba, you pay GST on the cost of a funeral but not PST. Harper and his friends love election time gimmicks such as GST cuts. But then they show their true faces later with talk of harmonization.In fairness, it should be noted the ranks of Ontario Liberals also include harmonization lovers--even one failed candidate who has written on the subject.
  172. J Kay from Canada writes: Sam Stone: You are most grossly mistaken. The GST was absolutely revenue neutral, in fact it was slightly revenue negative. In the first 5 years of the GST, it brought in LESS revenue in nominal terms than the FST. In real terms it took 8 years to surpass the last year of the FST and in GDP growth adjusted terms - the appropriate way to adjust the revenues for proper comparison - it hasn't.

    You are free to review the government financial reports going back to 1991 and before - I have, my area of expertise is financial analysis and modelling, and you are wrong.

    With harmonization, the PST would apply to a new set of goods and ceritus paribus this would result in a minor amount of increased revenue for the provincial government if they dont reduce the rate. When the Atlantic provinces harmonized theirs, they reduced their PST rates to compensate for the wider application of the tax.

    Whether the government does reduce the rates is secondary to whether the government should harmonize and anyone who has studied government finance, read up on government tax policy and is informed will say the exact same thing: the taxes should be harmonized and that doing otherwise is highly wasteful and inefficient, but don't let you dislike of Liberals and McGuinty get in your way of a good rant.

    I love how you think most people dont understand the PST or PST GST including accountants but you're so presumptuous as to suggest you do. I'm willing to be I have a more in depth knowledge of tax policy and the history of both PSTs and GSTs in this country than you and I've read numerous of the parliamentary finance committee reports that have investigated changes to tax policy, but dont let that get in the way of your grossly presumptive assumptions.

    All hail Sam, the self declared expert on the PST. LOL
  173. J Kay from Canada writes: Dan Short: Next time Dan read my comments before going off and you wont look the fool in responding as you have.

    My comment that in expanding the tax base through a harmonization of the PST, IF a corresponding reduction in the PST rate occurs, as it did in the Atlantic harmonisation, then while some people will now be paying PST on some new items that they would not have paid it on before, they will save more on the rate reduction - if introduced - on the bulk of the goods they consumer and that it is entirely possible that those reductions on other good supersedes the increased cost on the things like electricity bills, etc. Norm Jom, who I was responding to seems to have understood that, but since Norm's purchases are from the sounds of it predominantly limited to things that are PST exempt currently, the weighted average impact of a rate reduction but wider application would hurt Norm.

    The point of revenue neutrality for government in no way suggests that the changes will be revenue neutral for each individual and that it would be uniformly applied. That simply cannot be accomplished in a simplified tax code and thus governments add things like rebates to compensate.
  174. Brian W. from Ontario from Toronto, Canada writes: To Sam Stone and others re: the GST being a tax grab when it was introduced - that's wrong. In fact, even further to what David Robertson said, the GST actually raised less during each of the first 4 or 5 years of operation than the old FST raised in its last full year. That said, the old FST was by its nature a tax which could not taxes effectively -- over the past 18 years, sales of services have grown much faster than goods and the FST did not tax services. It's like having an income tax which didn't tax wages. The PST was initially intended to tax retail sales, i.e., sales in shoe stores, etc. The economy is now a lot more complex - now ad hoc rules have been used so that PST applies on all kinds of transactions -- software licences, partnership restructuring transactions -- the PST just isn't very good at doing that -- which means complexity for businesses involved in such transactions. Re: the possibility that the HST rate can be lower than the PST rate, don't expect this to happen. The HST would apply on a broader base, including consumer services. But the HST allows businesses to claim back the provincial tax they pay on their purchases. This is good for economic growth and efficiency, but it also means that an 8% provincial HST rate would raise about the same revenue as the 8% PST. And no- I don't work for either the Provincial or Fed government...
  175. sam stone from Toronto from Canada writes: J Kay from Canada writes: Sam Stone: You are most grossly mistaken. The GST was absolutely revenue neutral, in fact it was slightly revenue negative. In the first 5 years of the GST, it brought in LESS revenue in nominal terms than the FST. In real terms it took 8 years to surpass the last year of the FST and in GDP growth adjusted terms - the appropriate way to adjust the revenues for proper comparison - it hasn't.

    ============================
    Your post outed you as some redundant policy government worker. You still ignored my points but ranted about the efficiencies of harmonization. Plus, it is common knowledge and the gov admitted that the GST brought in billions more than expected. I am not concerned with your fabricated policy papers. Also, by the simple fact that refuse to answer questions regarding the NON EXISTANT savings on the part of the gov, proves that you are some kind of beaurocrat. Read sloooooowly, I admit harmonization is efficient in theory. In reality, it will raise the burden on taxpayes and the gov won't save a dime in wages. Go back to you exciting policy gov job...
  176. W M from Canada writes: Sam, we are at least agreed on Flaherty. As stated, I think the issues of income tax admin and GST/PST harmonization are separate and should be considered completely independently of each other. As for staffing at the ministry of revenue, I wasn't aware of the situation and have no idea what the rationale was for the organizational changes, so can't comment on whether it makes sense (... or how much sense it doesn't make). What I would want to know is what they are supposed to be doing and whether they are doing it any more productively on a dollar in per degree of compliance basis. If productivity per dollar spent is declining, that is definitely not good!

    One last thing, not sure whether you were defending Flaherty's plan to create a separate Ontario income tax regime or just pointing it out (so feel free to consider this an observation, rather than a challenge), but I would point out that it would most definitely have required a net increase in bureaucracy due to increased duplication. I recall that I was not keen on the idea for that reason, but can't remember Flaherty's precise rationale for proposing it. My recollection is that I considered it at the time to be at least partly political brinkmanship and partly the usual desire of small time politicians everywhere to accumulate more powers. As for the rest of the rationale, I can't remember.

  177. sam stone from Toronto from Canada writes: W M from Canada: I was not defending Flaherty but merely pointing out that in 2001/2002 he wanted an Onatrio that was to go solo on taxes. Now as Minister of Finance, he wants everything harmonized. I agree PST is difficult, especially for small businesses that cannot afford expert help. But, I do not trust McGuinty or Flaherty. Also, I attend practitioners conferences in Mississauga on a regular basis. Most people I speak with agree that HSt would be easy, but they don't trust the politicians to find the efficiencies or to make the tax revenue neutral. If you have the pleasure (or displeasure) to work with any provincial Revenue employees, ask them if they think the place has been streamlined since the corp tax people left.
  178. Blue Reformer from Canada writes: What's good for business is not necessarily good for consumers. So, business saves $100 million a year from harmonization ...are businesses promising to reduce prices, hire more workers, pay higher wages?
    It is time we realize that the interest of Ontarians and business are often conflicting.
  179. Blue Reformer from Canada writes: When other provinces are showing for independent streak, Ontario is seeking more integration with Ottawa.
    Ontario is paying a big portion of the tab for this country. Harmonization of sales tax would only lead to more money given to Ottawa.
    No to harmonization and Yes to more Ontario-centered programs.
  180. Nick D'Avirro from London, Canada writes: Why do we pay tax on anything we buy? To stimulate the economy all sales taxes should be eliminated! Income tax at 35% across the board including businesses
  181. Political Agnostic from Canada writes: David Robertson wrote: 'With harmonization, one tax; one administration.'

    I agree wholeheartedly with that in principle, but why stop there? Why not a national (included/buried) Value Added Tax administered by the Federal Government a la European style?

    I realize that would probably be problematic from both a political and a government accounting point of view, but surely the equalization payment gurus could come up with a 'satisfactory' solution by which they can shuffle our taxpayer money around between our various levels of government.

    If we just 'buried' a VAT in the posted price of all commodities and services and adjusted the rate to give all dependent governments their pound of flesh, at least we would know that what we are about to purchase will cost us the posted price, without add-ons.

    Too simplistic! I'll move my tongue to the other cheek.
  182. Am Impressed from Canada writes: Thanks to J Kay, Brian W and David Robertson for wise posts in a sea of ignorance!
  183. Bert Russell Paradox, BC from Canada writes:
    Flaherty had a running battle with McGuinty that Ontario should be cutting taxes for the last year. McGuinty and his Liberal trough brother in Ottawa went ballistic. Now McGuinty is looking for ways to save face.
    Isn't it strange that most of the gang violence is in Provinces that have Liberal or NDP Governments.
  184. Norm Jom from Petawawa, Canada writes: I would like to see the real story on this. Reading this article it states it would make businesses more competative. How is that possible since they are on a level playing field and the taxes don't apply to out of province sales. The article says businesses will save 100 million dollars. How are they going to save that much money? How many businesses are we talking about there? Businesses already charge the government a premium for collecting PST, so how is it they will be saving money. I will agree it may save the government some money in the long run through streemlining, but not businesses. I can't imagine that collecting the PST even involves 100 million dollars, if it does, it needs serious reform in this computer age. Melding with the GST isn't the problem. And of course there is still the issue with the poorest, low income Ontarians and low middle class, who the exemptions were designed to help. When these go away it's going to be a substantial increase in expenses for necessities for these people. No new/additional tax should be such a burden on the poor, especially when we are in a recession. BTW while the 100 million figure (which I seriously question) may sound like a lot of dollars, if we are talking about 500,000 businesses it's really and average of $200 per business per year. Is this worth costing millions more to consumers who in essence are already paying for whatever the expense business is paying. It doesn't take a genius to realize the consumer is going to get sucked in, they admit in the article the consumer will feel it. This is not going to cause lower prices it's only going to cause higher taxes. As for the GST, posters are right, in the short term there was less revenue gathered from it when it was initiated. But there was also no real savings to the consumer as I recall when most businesses never bothered to adjust thier sales to reflect the lost manufacturer's tax. They simply charged the consumer more.
  185. Norm Jom from Petawawa, Canada writes: ...Continued from my previous post....

    Part of the reason the GST resulted in less revenue for the government was the massive costs associated with it. They paid out many dollars for new cash registers and costs for business accounting to collect. Once that was taken care of itbecame a massive cash cow for them.
  186. Bert Russell Paradox, BC from Canada writes:
    Business is a shell game ... they tell us they are the turbines of the country ... they whine about their taxes, which they write off with exemptions, our dollar goes to par American and they gouge for profit.
  187. Andrew Wilson from Sayulita mx, Canada writes: So Business gets a break and we pay more for heating oil , books and childrens clothes. Good job McGuinty. Looks like the little guy gets to take
    it up the hoop and fund Big Business one more time.
  188. sam stone from Toronto from Canada writes: Am Impressed from Canada writes: Thanks to J Kay, Brian W and David Robertson for wise posts in a sea of ignorance!
    =========================================
    Actually, it is your complete ignorance that makes you impressed by inaccuracies. The GST took in considerably more than projected. The gov't own GST IT's clearly stated that the gov anticipated the GST to raise CPI by 2.5 %. Do your own research before you believe a bunch government workers trying to justify their existance. And I repeat, LOOK AT THE TIMING. McIdiot needs tax dollars and sees this as a way of accomplishing his goals while pretending to save businesses money. Also, when the GST was introduced, ALL retailers increaseed their gross profit margins to compensate for the lower cost base. In other words, the consumer still paid more. Do you really think that businesses will pass on the savings? You know, the way prices came crashing down when the $CDN was par with the $USD!!!!! Gas prices fall quickly when oil prices drop but go up slowly when oil prices rise. That's the way it works right Mr J Kay the gov worker???
  189. sam stone from Toronto from Canada writes: Norm Jom from Petawawa, Canada writes: ...Continued from my previous post....

    Part of the reason the GST resulted in less revenue for the government was the massive costs associated with it. They paid out many dollars for new cash registers and costs for business accounting to collect. Once that was taken care of itbecame a massive cash cow for them.
    =======================================
    You make excellent points and I don't assume that the supporters of the harmonized tax took a net figure when calculating the difference. There was also the HUGE refunds that went to ALL businesses that had FST paid inventory. J Kay, was that taken into consideration when you did your calculations??
  190. Brian W. from Ontario from Toronto, Canada writes: Sam Stone -- you suggest that Kay, Robertson and I each have agendas to convince people that the GST when it was introduced didn't raise more money than the former FST. What agenda would that be?? The GST was introduced 18 years ago...we're a little late on trying to make the introduction popular don't you think?! I think the only thing Kay, Robertson and I share is knowledge and a willingness to state the facts.

    Re: the CPI impact, there was an expectation that the introduction of the CPI would result in a one-time bump in the CPI -- that is because of the way the CPI is calculated. When you take taxes off business purchases and put them on consumer services, there will be an increase in the CPI. That's arithmetic. In fact though, as I recall, the increase in the CPI turned out to be less than the government originally predicted. The fact that the CPI rose less than anticipated strongly suggests that the tax reductions to manufacturers were passed through to consumers. This is partly because a recession occurred in 1991. In this regard, this could be a benefit of harmonizing the Ontario PST now.

  191. David Robertson from Toronto, Canada writes: Mr. Stone,
    If you are so confident in your position and knowledge in this area and as a tax professional, why have you chosen to post your comments under a pseudonym? If you truly believe your posts are accurate and that you have the experience and knowledge that you claim, you should have the confidence to put your real name and reputation behind them. I have.
    David Robertson
  192. Brian W. from Ontario from Toronto, Canada writes: David Robertson - Do you think that there is a chance that when the budget is released on Tuesday, McGuinty will jointly announce that Ontario is harmonizing? Or would this be more likely to be in an Ontario budget (if it happens)?
  193. David Robertson from Toronto, Canada writes: Brian,
    I have no inside knowledge. I would be very surprised (yet delighted) if the announcement was made on Tuesday. However, I believe it is more likely to be a measure announced when the Ontario budget is issued.
    This is a great initiative by both the Harper & McGuinty governments. Points to Minister Flaherty and the federal Department of Finance for keeping harmonization on the agenda over the past few years. And points to Premier McGuinty for recognizing the significant benefit harmonization will have on Ontario's competitiveness and productivity.
  194. bob saunders from Belleville, ON, Canada writes: Leave the GST at 5% and take away the GST Credit. My mother-in-law has no income( as an immigrant over the age of 60 she isnt entitled to OAP, CPP....etc) but she gets her $60 GST credit every 4 months, or whenever it is. Add the GST credits back into government coffers and that'll pay for lots of services.
  195. Brian W. from Ontario from Toronto, Canada writes: Bob- that's rather brave! ;-) Hope your mother-in-law doesn't read these threads!
    Seriously, it would save a lot of $ to be sure, but the refundable GST credit offsets the natural tendency of the GST (like all sales taxes) to be regressive at the bottom end of the income scale. Even with the non-taxation of food and rent, the GST would be regressive in the absence of the credit. Hard to imagine any government doing this.
  196. Freddie B from Woodbridge from Canada writes: Brian and Bob. After your love in, please answer the question. Where are the savings in gov streamlining coming from. I will repeat again. Ministry of Revenue has 5 ADMs and 1 DM. When corp tax was still a function of Ontario gov, there was no DM and ONE ADM. So this is how McGuinty saves taxes. And blah blah blah on your credentials. There were such large refunds of FST paid on inventory that it only APPEARED that the GST collected less than the FST. You two love that the consumers will be screwed and businesses will save a few bucks. Then again, I you probably don't understand the complexities of PST and are embarassed everytime a client asks you a question. GST is simple but then so was PONZI. Mr Consmer, get ready to get hosed. I bow to your knowledge. NOT!!!!
  197. David Robertson from Toronto, Canada writes: Freddie B,

    First, I set out the same challenge to you as I did for Mr. Stone. If you are so confident in you knowledge and position, then as opposed to launching personal attacks on the others participating in this debate, use your real name and credentials.

    Second, with your assertion that consumers will be "screwed", they are already being screwed. PST is an input cost to businesses across Ontario. All that does is increase the cost to businesses in providing their goods and services. This cost is passed along to consumers in the form of higher prices. In fact, the Department of Finance and Professor Jon Kesselman have calculated that the true effective PST rate in provinces like Ontario is upwards of 11 to 12%, when one takes into account the PST paid by businesses that is then passed along to consumers in the form of higher prices.

    So under the current PST system, consumers are already getting screwed -- they just don't realize it.

    With the move to a harmonized sales tax in Ontario, when I get charged 8% sales tax, I'll know exactly how much tax I am paying.
  198. David Robertson from Toronto, Canada writes: For those who are interested in learning more, the Ontario Chamber of Commerce report can be found at http://occ.on.ca/Policy/Reports/441
  199. Norm Jom from Petawawa, Canada writes: As I mentioned earlier, where are all these big savings for the consumer. The article says 100 million in savings for businesses. If there are say 500,000 businesses in Ontario that's an average savings of $200 dollars per business. Hardly something significant at all and not something I suspect they will pass along to the 10 million residents, cough wow 10 bucks a person.

    I admit my figures on how many businesses is a wild guess, but probably a conservative estimate. $100 million isn't all that much in any case, I can't imagine it's going to do anything for the consumer. Except of course as I mentioned screw those who can ill afford the additional tax on necessities. You know that 10 bucks will be eaten up in my first hydro bill that has a harmonized tax attached to it. There's no savings at all for the consumer.
  200. Brian W. from Ontario from Toronto, Canada writes: Freddie B -- there are a number of reasons why economists are in favour of a harmonized sales tax. First, VAT's generally are preferred over retail sales taxes because they take the tax off business inputs. This would allow Ontario businesses to compete more effectively with businesses in other countries. With the exception of the US, virtually all other countries have VATs, not retail sales taxes. So, even if Ontario didn't harmonize but just got rid of its RST and introduced its own VAT (like Quebec did), this would be better than keeping the RST. But harmonization with the GST would allow Ontario businesses to only deal with one tax administration system, one set of rules. This would also save Ontario $ for the tax administration of the current system. That's more than a few ADMs -- who do you think audits RST, keeps track of taxpayer accounts etc? Lastly, I am not sure if you are suggesting that I don't understand the complexities of RST, or you don't understand them... but I can tell you, RST by its nature is problematic when it comes to non-retail transactions such as corporate restructuring. For example, if a company has non-taxable custom software and it restructures its organization, putting the software into a subsidiary to provide services to the parent company ... Poof - it now becomes taxable. This is just one example of many. I am not saying the GST is perfect, but it is much better than RST in these areas. Ultimately, we as Ontario taxpayers will bear whatever taxes are imposed... whether as taxes on our incomes, or on our consumption. But why should we throw away money through inefficiency?
  201. Sober Second Thought from Toronto, Canada writes: Once again, the expensive business lobby puts the gears to the taxpayer.

    Dalton would have to drop the HST to 6 or 7 % to have some credibility on this.
  202. Joe Joe from Montreal, Canada writes: Apu Nahasapeemapetilon from Vancouver, Canada writes: Is it true about Quebec?

    Don't wish for the Quebec version of 'harmonized'. We are charges the GST, then charged the PST on the total(including GST). Tax on taxes...
  203. Freddie B from Woodbridge from Canada writes:

    Brian W: We are in agreement on efficiency. Where we differ is, you trust the politicians and I don't. There is no use arguing the theoretical efficiencies because I agree 100%. I don't trust McGuinty because a few months ago he was firm as to no harmoniztion. Now he sees a way to sneak in higher taxes. Let's face it, the public will just pay the tax and not do the calculations. In a recent poll, 92% of respondents say that they will renovate homes rather than sell. If they hire a contractor, they will pay more under a harmonized tax that status quo. Also, I would much rather see a VAT similar to Quebec's. Ontario should keep control of it's revenues. Think about it, if all business wants is an input tax credit, then why do we have to give up control?
  204. Brian W. from Ontario from Toronto, Canada writes: I think probably I do trust the politicians more than you (although definitely not as much as they'd like me to ;-)

    You are right that if Ontario harmonized with the GST, it would give up some of its control over the tax. But if you are distrustful of McGuinty, I would think you'd be in favour of that. Nevertheless, in my view, although I would prefer full harmonization, if Ontario adopted its own VAT which substantially mirrored the GST, I would applaud that as a giant step forward, particularly if they had some form of joint administrative agreement with the feds to simplify the operation for businesses. Best regards, I'm going to hang up my computer and enjoy the rest of the weekend -- hope you do too - cheers BW.
  205. GlynnMhor of Skywall from Canada writes: Brian W... writes:"... if Ontario harmonized with the GST, it would give up some of its control over the tax."

    True, but it wouldn't be giving up control over the spending of the money from the tax, and that's what's most important.
  206. Steven Ferguson from Canada writes: Tax harmonization should have happened years ago when the GST was first introduced. It was only silly political games which prevented it. If business can same $100M in administration costs, while having no net impact on the funds raised, it is obviously something that should be done. Too bad it takes a recession to do the obvious.
  207. Donald Wilson from Canada writes: Be Aware ONTARIONS - harmonization will sharply INCREASE your sales tax . And it will hurt equally the middle class - the workers as they pay tax on all service labor and clothing and the many other items that currently do not incur sales tax . If they want to exempt Business from some sales tax , just enact the Ontario legislation that would allow business to claim back the tax as they now do with other input tax claims . Harmonization is clearly a hugh tax grab . We lived thru that in Atlantic Canada .
  208. Gail Thomas from Canada writes: The last time I checked by hydro bill still hasa Debt Retirement charge on it which is included in the overall total that GST is applied to. So harmonization will see an increase for McGinty's coffers. Since McGinty doesn't believe in tax cuts, we the consumers will be hit again, and again, and again. Harmonizing will show that actual tax is still below the 15% hidden tax we used to pay, unless the province decides to up it again by 2%.
  209. DON BARTA from Canada writes: -

    - If Ontario wants to sell this idea. why not make it 5% PST to match the GST and get rid of that Health Tax or Fee or whatever they call it now?

    - Because the GST is on more items this should work out to the same amount of $ for Ontario.

    - Auto trade in adjustments should be on the full 10% amount also........

    -
  210. Norm Jom from Petawawa, Canada writes: Wow, it's very simple math folks. They are claiming it will save business 100 million dollars. That's the equivalent of about 10 dollars per person in Ontario per year. If business is only saving a total of 100 million there is no way you are going to get any break whatsoever.

    It doesn't take a mathematician to figure out that in hydro alone you will be paying more than 10 dollars in one year in increased taxes let alone all the other items it will be applied to. Think people, it's a tax grab no matter how you look at it. Don't be fooled by that 100 million, it's not the amount of money you think it is in a province our size.
  211. joe kelly from Canada writes: What a bunch of whiners.

    "I want better health care I want better schools I want better transit bla blah blah AND I want lower taxes". Yes, it's called Reaganomics/Bushanomics --- buy now pay later, much later.

    Harmonization is a no-brainer long overdue and the reason it hasn't been adopted until now is because the government listens to aforementioned whiners.

    Now, I do agree with those who say harmonization should or could be tax neutral and certainly the issue of how effectively our tax dollars are spent --- City of Toronto waste is Exhibit A ---- is a worthwhile debate. But not knee-jerk reactionism.
  212. Norm Jom from Petawawa, Canada writes: joe kelly from Canada writes: What a bunch of whiners. "I want better health care I want better schools I want better transit bla blah blah AND I want lower taxes". Yes, it's called Reaganomics/Bushanomics --- buy now pay later, much later. Harmonization is a no-brainer long overdue and the reason it hasn't been adopted until now is because the government listens to aforementioned whiners. Blah blah blah... --------------------------------------------- Joe, as it is in the article it's going to cost consumers more in taxation, it's nothing more than a tax grab. It's not whining to complain about additional taxes. If the government needs more money for schools, for transportation, heck for anything. The way to get it is by increasing taxes, but by doing it in a manner that is transparent, tell us you are increasing taxes to pay for X. As I've outlined this isn't really doing business much of a favour at all, it amounts to an insanely small amount of savings for business. Certainly nothing that would be passed along to consumers. Not only that it will result in increased tax revenue no matter how you cut it. Most of that tax revenue will be on necessities that are now not subjected to provincial taxes. It's a no-brainer that this will have an impact especially on the lowest income Ontarians. It's not whining, it's recognizing the reality of what this is really going to accomplish. The 100 million dollar figure is the government's figure, it's not hard to break down at all.
  213. Am Impressed from Canada writes: mr stone - your personal attack does nothing to reduce the impression that you don't know what you're talking about on this issue.
  214. J Kay from Canada writes: sam stone: Well I hate to burst your bubble sparky but I'm not some government policy wonk nor am I in any way involved with the government or public sector and never have been. Instead I'm someone who wishes to be informed and thus have some basis in fact for my positions. To that end I read all of the government financial reports, budget documents, DMRs and numerous policy reports.

    It's sad that you have to resort to such dismissals instead of addressing the point. Its further sad that you attempt to dismiss by making some vague generalization as to "common knowledge", as if it is such, and as if common knowledge, were it true, is somehow always based in fact instead of ignorance.

    As I already mentioned to you as others have, the GST brought in LESS revenue in it's first 5 years than the FST did in its last year. Adjusting for growth it has brought in less than the FST period. To hopefully disabuse you of your belief, the following are the GST revenues following the last year of the FST, which brought in $17.67 billion:

    91-92 $15.3 billion
    92-93 $15.4 billion
    93-94 $17.0 billion
    94-95 $16.8 billion
    95-96 $18.1 billion

    Only after 5 years did the GST in nominal terms surpass the FSTs last year of revenue, which due to economic growth was certain to occur. Adjusting for growth - GST revenues like income tax revenues grow at the nominal GDP growth rate - the GST revenues have NOT surpassed the FST adjusted last year.

    Norm's comment about the higher cost of administering the GST while true is irrelevant, since the revenues are NOT netted against the cost of collection. They are simply netted against the GST credits and thus represent the an equivalent comparison.

    Thus as I and other have noted, the GST was NOT a cash cow and did not bring in more revenues.

    Oh and Norm, I am a mathematician.
  215. J Birch from Hamilton, Canada writes:

    Oh yes, by all means lets get rid of the Liberals in Ontario and put the Con Thieves back - they did so well running us into deficit under Hairass, just like their Federal Lying counterparts.

    If conservative times are tough times

    Tubby times are tougher times

    Mosquitoes and Conservatives - two things this country could do without

    .
  216. joe kelly from Canada writes: Norm Jom, I agree with you that government should be more honest and open about issues such as taxation. The fact they are not is partly our own fault because we claim to want honesty but too often we shoot the messenger. We are children. We whine for things and then we whine when we get them. I agree also that harmonization will lead to incremental revenue for the Province --- provided they do not adjust the existing PST. That is simple math. But I disagree with you that there are no meaningful savings to business. As an employer (18-20 person consumer manufacturer distributor) ) this will make our job a bit easier. As an aside, most consumers are blissfully ignorant of how PST and GST are charged when they go to the grocery store. The PST rules are utterly arcane and I can assure you that even major grocery chains often get it wrong. I have a reasonable understanding of the rules and the number of times I have found mistakes made by such retailers (in favour of the government) is astounding. The grocers have no axe to grind (i.e. nothing to gain) they simply don't know or can't bother getting it right. Therefore, it may sound counter-intuitive but harmonization will increase transparency for the consumer by simplifying tax application. This latter point --- consumer price simplification ---- is the reason we should support this. How the money gets spent, well, that's a whole other debate.
  217. J Kay from Canada writes: Sam Stone: The was an error in my post above. The proper list of GST revenues following the FST were:

    91-92 $15.3 billion
    92-93 $15.4 billion
    93-94 $15.9 billion
    94-95 $17.0 billion
    95-96 $16.8 billion
    96-97 $18.1 billion

    Considering that from 1976 until 1989 FST revenue growth exceeded 12% per annum and that following the introduction of the GST, the GST's revenue growth has averaged 5.6% per annum (excluding the years with the recent rate cuts), when one adjusted the last year of the FST for economic growth, the GST revenues have NOT surpassed the last year of the FST. If we had maintained the FST and it continued to grow at nominal GDP growth rates as it had done for the preceding 30 years it would have brought in $37 billion in 2005-06 compared to the $33 billion the GST did, which renders the cash cow argument asunder.

    It also puts to rest the notion that the GST had anything to do with balancing the budget during the Liberal years in office.
  218. joe kelly from Canada writes: J Kay, good posts. Some people like to debate the law of gravity, no point citing the facts for them. As for the FST, unquestionably a form of taxation that acts (rather acted) as a drag on growth. Before folks pile-on to dispute that comment, they should follow your example and read-up a bit.
  219. J Birch from Hamilton, Canada writes:

    To quote a respected and knowlegable writer:

    Harper is an economist who has never held
    a real job and Flaherty is a lawyer who
    wreaked havoc on Ontario's economy,
    in his role as finance minister. Their
    brain waves fall well short of the beach.

    --------------------------------------------------------------

    Man cannot live by incompetence alone.

    – Laurence J. Peter

    .
  220. Kublah Khan from Canada writes: Read my lips "No new taxes" !

    Translation: - We will just raise the old ones!
  221. Ken Hedgewick from Windsor, Canada writes: Not a bad idea if the Provincial Sales tax was reduced from 8% to 6% to equalize the overall amounts paid by the average consumer. This way, there would be no need to separate what is currently taxed at the Provincial level and what is not?? Combined tax would be 11% instead of 13%.

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