Shhhhhhssssttt - They are talking about HST

Posted November 17, 2009

By all accounts the new Harmonized Sales Tax is a progressive tax?

1.     It should diminish the number of employees who now work for the Ministry of Finance and transfer the collection and reporting to Revenue Canada. But will the Province shed jobs and what happens if the Federal Government re-employs them? If so there will be no cost savings just more bureaucracy.

2.     The Federal Government has already paid the Province of Ontario $3 - 4 billion dollars as a subsidy to create and manage this new tax. Unfortunately the deal is for a minimum of two years and the HST is fixed for that time. McGuinty is not giving out rebate cheques he is assisting in creating a larger Federal deficit. Has anyone asked how the federal government recouping its money? Premier McGuinty we don’t need $1,000.00 rebate cheques as a bribe to better your chances in an election. We need jobs and a responsible government.

3.     The real reason the HST has been announced is not to make Ontario businesses more competitive but to make them more profitable. Capital Tax has been scrapped and what they are not telling us is that the Provincial Corporation Tax rate will be reduced to about 10% as well. The hope that lower taxes will create more jobs is ludicrous. Funds managers and shareholders require greater returns and in hard times taxpayers will be subsidizing this greed.

4.     The fact that exports will become more competitive is preposterous. Goods and capital that are presently manufactured for resale are exempt from provincial sales tax now. They assert that this will be an effective way of dealing with an escalating Canadian dollar. Lower corporate taxes and the elimination of capital taxes will serve to address an escalating dollar if Bay Street doesn`t keep all the profit. Ultimately it will not matter, the Yuan will be adjusted to fairer market valuation, the U.S. dollar will benefit slightly and with interest rate increases on the horizon, the Canadian dollar will probably achieve parity. In any case, this is ultimately the domain of the Bank of Canada and our new Fuhrer, Stephen Harper.

5.     What they are not telling us is that this new tax will be added to a host of presently exempt services. This will create a huge windfall for the Provincial Government. But will they use this money to pay down the deficit or find new ways of taxing the public?

6.     A real boon would have been to reduce the HST to 10% to take into account the new taxation rules. McGuinty has already agreed “not” to do this for a minimum of two years. If our economy returns to normal, government coffers will be so ripe with tax revenue that Consultants and Insiders will rape and pillage this new found wealth without regard for the Canadian taxpayer.

This could have been a progressive tax but instead it has been laced with more corruption and lies. What the public should be shown is an accounting of this new tax and how it will impact the deficit. It should identify the increases in tax collection from the public, the losses from the tax reductions to corporations, savings from Provincial job cuts, forecasted dollar increase of exports and how taxpayers win, how many new jobs will be provided by this new tax and how will it help in paying down the deficit. This type of disclosure is not only relevant but it holds government officials accountable and should help to reduce corruption and nepotism – we can no longer afford it. If we don’t do so, all we will get is Shhhhhhiiiittt!

Thank you,

Joseph Pede

Harmonizing Ontario taxpayers around this new tax should not be too difficult. We will, along with the opposition parties, complain, stomp our feet and then without additional fanfare the new tax will be legislated. That is generally how the electorate gets treated in Canada as a whole. Our opinions, election promises and transparency in government no longer have any meaning.