HST will cost Ontarians more

New data released today by Ontario’s NDP shows Dalton McGuinty’s HST will take $895 million from the pockets of Ontario drivers in new gasoline costs alone – an average of over $200 in additional annual gasoline costs for an average couple with children

The findings were generated using Statistics Canada’s Social Policy Simulation database and model.

NDP Leader Andrea Horwath noted the NDP had earlier submitted a freedom-of-information request for the government’s analysis of the impact of the HST on gasoline prices. Although the government confirmed the existence of the records, it denied the request for their disclosure. Thus, the NDP went on to conduct their own study. “The Premier refuses to tell Ontarians the truth about the real costs of this new tax,” Horwath said. “Unfortunately, the numbers show that the cost of living in Ontario is about to jump significantly, and the premier should stop hiding the real costs of the HST.”
 

Finance Minister Dwight Duncan says the NDP has "torqued the numbers." He said the tax cuts to individuals actually exceed cuts to corporations. The Treasury will lose between $3-4 billion in the first year, he said. "We are cutting taxes for people. Overall 93% of Ontarians will pay less in taxes," Duncan said.

Premier Dalton McGuinty admits that the 13 per cent HST will mean short-term pain for Ontarians before the long-term gain of a more prosperous economy. “For families at the outset, there will be an increase in taxation,” the Premier said. “It will affect … 17 per cent of their purchases,” he said, referring to items such as gasoline, home energy and Internet bills, tobacco, domestic flights, haircuts and taxi fares that will be taxed at a higher rate. Items such as newspapers, books, coffee, fast-food meals under $4, diapers, children’s clothing and booster seats, and feminine hygiene products are exempted from the HST. Taxes on 83 per cent of products – including groceries – will not change.

According to the Toronto Star, many economists predict the business-friendly blending of the 8-per-cent provincial sales tax with the 5-per-cent federal GST will boost the economy, eventually creating up to 600,000 jobs and generating $47 billion in investment. “Experience tells us that over time those savings (incurred by business) will in fact be passed on to consumers. It’s not going to happen all at once,” the premier said. “That’s why we have the special support we have in place for the first couple of years,” he said, referring to transition payments of up to $1,000 per household for most low- and middle-income families. “That’s why we reduced personal income taxes. We’ve tried to make this as fair as possible.”

Regardless of the Premier’s claims of “fairness”, the average family is likely to see and feel the effects of a general decrease in the money in its pockets. Unfortunately, this will not make for a very happy Canada Day.