Michael Prue Response to CARP HST Poll

In our last newsletter, CARP ActionOnline we asked readers to weigh in on the decision by the provincial governments of B.C and Ontario to implement a Harmonized Sales Tax (HST) in 2010. The results are in and most polls respondents don’t believe that the tax credits will be sufficient to offset the tax increase created by the HST and 85.4% of them don’t believe that businesses will pass through their savings to consumers. We gave politicians and by-election candidates in B.C. and Ontario the opportunity to comment on the results of our poll. Here are the responses we received by press time:

Ontario’s NDP is opposed to the McGuinty government’s ill-conceived Harmonized Sales Tax (HST).

We are glad to see the many concerns retired Ontarians have voiced about this new tax. It will clearly have a very a negative impact on those who are on fixed incomes. Simply put, life will become much less affordable for retirees.

The HST means an eight per cent increase on a lengthy list of goods and services, including home heating and hydro, gasoline, vitamins, airline and train tickets, legal services, haircuts, magazines and newspapers, veterinary care, and real estate commissions. But the HST’s impact doesn’t end there. The indirect effects might be even more significant – for example, experts say condominium fees will increase nearly seven per cent and tenants will see their rents increase up to three per cent.

Although the McGuinty government has tried its best to muddy the facts, the HST is relatively straightforward. It is a tax shift – business taxes are being reduced while consumer taxes go up. This tax shift will result in consumers paying upwards of $7-billion more each year, depending on whether businesses pass on their savings or not. Those who responded to CARP’s survey do not think savings will be passed on – they probably remember the same promises were made when the GST was introduced!

The McGuinty government points to sales tax harmonization in Atlantic Canada as evidence that there will be no impact on consumer prices. But the government conveniently fails to mention that the Atlantic provinces actually lowered their sales tax rate when adopting the HST.

One of the other claims is that the HST will boost job creation. Ontario has lost more nthan 300,000 jobs since 2003. Cities like Toronto, Sudbury, Windsor and London have unemployment rates of more than 10 per cent. Workers in these cities need proven job creation policies, not a new tax on daily basics.

Even the Ontario Chamber of Commerce – the biggest supporter of the government’s plan – admits the HST will “slow employment growth by between 10 and 40 thousand jobs . . . as businesses substitute capital for labour in the production of goods and services.”

So what’s in this tax for ordinary Ontarians? You will be paying eight per cent more on hundreds, if not thousands, of goods and services. The McGuinty government’s tax shift will result in consumers paying billions more without even any new investments in public services, like healthcare and education. It will slow job growth and help keep consumer confidence in a rut.