CARP members are predominantly retirees, many on fixed incomes who do not always have enough discretionary income to accommodate this tax hike which will cost the average Ontarian anywhere from $250 to $750 more a year. The government seems to be placing a lot of reliance on the idea that companies will pass through the savings to consumers. However, if this pass-through effect does not occur when the transition payments in Ontario run out in three years, CARP is concerned that many fixed-income seniors will simply be left paying higher taxes with no additional offset.

CARP recognizes the potential benefit that harmonization may bring for the economies of Ontario and British Columbia, but is concerned with the effect that this may have on older Canadians, especially those on a fixed income. Perhaps the transition benefit promised by government should not have a fixed term, but should be phased out when the savings to consumers have been effectively realized. Ontario Revenue Minister John Wilkinson was recently quoted as saying that consumers need to be sharp and insist that businesses pass on the savings. However, CARP does not believe that this duty should fall solely on the backs of the consumers.

Finally, CARP believes that the government should learn from the lessons of the provinces that harmonized back in 1997. Darrell Dexter, the new premier of Nova Scotia suggested to the premiers of the harmonizing provinces to be clear with just what the tax is going to look like and what it will affect. Other groups, such as the Canadian Taxpayers Federation is calling on the government to release a full list of goods that will increase in price due to harmonization. CARP agrees that the governments of Ontario and British Columbia should be as open as possible about the effects of harmonization on the increase in taxes on consumer goods, the impact on government revenue and the impact on consumer prices.

Keywords: HST