While the average Ontarian will be out of pocket $37, senior couples can expect to pay roughly $270 more
The findings of Not a Tax Grab After All, a well-publicized report released this week, has been used as evidence that the HST will not be a serious burden. However, while that may be true for the general population, the Report actually supports CARP’s call for HST mitigation measures for seniors. In response to the federal and provincial governments’ inadequate response to the financial hardship that the HST will impose on seniors, CARP continues to emphasize the need for remedies that respond to the unique financial circumstances of retirees and those on fixed income.
Not a Tax Grab After All echoes CARP’s assertion that the tax relief accompanying the HST will have a limited benefit for retirees and those on fixed incomes. The Report found that single seniors “benefit relatively little from the new property and sales tax credits” since the changes to sales and property tax credits “increase the credits of non-seniors to the levels enjoyed by seniors, so the latter group in general experienced no new benefits.”
Seniors were dubbed HST “losers” in the report since, on average, senior couples will be worse off by approximately $150. The report found that 45.5% of senior couples with combined (annual) income of $20,000 to $50,000 can expect to pay (an average of) $270 more. It also revealed that “even at incomes under $20,000, about 8% of families will experience a loss” and made note of the fact that “other analysis suggests that these tend to be families who current consumption is close to, or exceeds, their current income. For example, seniors who support their current consumption by drawing down savings will tend to show losses because their consumption exceeds their current income.”
So, while the report’s central conclusions support the provincial government’s assertion that the HST will amount to negligible cost increases for consumers; it underscores the differential impact that the HST will have on seniors. The report’s high profile gives reason for hope that the Ontario government will heed its conclusion that “the province may wish to re-examine the new credits and calibrate their design somewhat to account for the possibility of some unintentional losers in vulnerable households.”
For its part, CARP will continue to advocate for a home energy rebate and HST relief grant for low and middle income seniors. Stay tuned to CARPActionOnline for developments on this issue. To read the Not a Tax Grab After All click here
Keywords: HST, seniors, income