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Toxic HST launched by province this week
07 May 2010
The much-dreaded Harmonized Sales Tax (HST) snuck into our Ontario lives like a nasty thief in the night, this week. Unsuspecting home buyers who expected the HST to kick in July 1, met with a nasty, expensive surprise. Home purchases had another 8% tacked on, as of Saturday, May 1.
So did delayed closing costs, gym memberships, landscaping and airline tickets. Obviously the province wants you to be fat, stay at home and have an ugly lawn. It's that or pay their toxic tax.
And toxic it is.
Think about all those seniors who travel to Florida, Arizona and Mexico in the winter. A $1,000 round trip will cost them $80 more, or $160 for a couple. For people on a fixed income who scrimp and save for their annual vacations, that's a lot of money the government is taking from you. And what does the government give back in return?
That's right: you have MPPs with $100,000+ salaries and golden pensions. No tax cuts, no relief for pensioners. Gimme, gimme, gimme is the government's mantra.
As noted in the Packet and Times this week,
And that's just energy. A lot of those things you were used to paying the 5% GST on will be taxed at 13%. (Let's also keep mind mind that Ontario Hydro posted a 12% rate increase this year, in good part thanks to the bloated salaries of Hydro One execs...)
$350 is a week's salary - before taxes - for anyone making minimum wage.
The HST will be enough to make people reconsider some big purchases like homes (not to mention voting for the Liberals in any future election). Those $300,000 condos you've been looking at, with a eye to retiring here? Add another $24,000 to the price. And those $600,00-$750,000 waterfront condos: add another $48,000- 60,000! Oops! Better consider staying where you are, at least until the government changes and the HST gets repealled.
The HST will seriously hamper home sales in Ontario. But take heart: condos in Florida are still selling below their real value! McGuinty is now the Florida real estate industry's best friend.
And will that tax improve productivity, the economy, or business success? No. It will simply drain the life out of Ontario.
What really amazed me was not that the McGuinty government is sucking the lifeblood out of low-to-middle income earners, but that they lied so egregiously about it. The press releases from the Liberals said it would be good for business. It would give businesses more money. It would allow businesses to hire more people. And that consumers would benefit from lower prices.
Huh? That's so bald-faced it makes me stutter. The government makes this wildly illogical assumption that companies will lower their prices to compete, thus encouraging growth and consumer sales. Proof that McGuinty lives in a bubble, protected from the negative effects of reality. Most Ontario manufacturers are already stressed by competition with China and its cheap goods. Most Ontario businesses were hurt by the recession. Adding tax es HURTS them, not helps them. Maybe if McGuinty had to work in a Wal-Mart for a year he might understand. Maybe if he had to shop in one, he'd understand.
It might not have been so hard to swallow had they told people the province needed the tax to pay for rising health care and education costs. Had our Tammany-Hall MPPs taken a salary cut, we would probably have born it stoically. But MPPs kept their salaries and simply raised taxes while saying how it would help us! George Orwell's newspeak at its most proficient!
I estimated that for my former retail store, it would cost at least $750 to have a technician reset the cash register to put HST on all the items that didn't have it. Plus I would have to pay my bookkeeper to adjust my accounting software. Plus the compensation we got from collecting the PST (5% of the total) was taken away. For me, that was more than $500 a year. Gone, no compensation.
I figured that my little store would have to shell out at least $1,500 to make the switch. And every year I'd lose that $500, not just in year one. Imagine what a big box retail store will lose!
And will those stores eat the loss or pass it along? Of course: you, the consumer will pay more to compensate for that loss. Jobs will be lost, or cut back, too. Thanks to the HST.
As a small business, I figured I would have to LAY OFF staff or reduce their hours to recoup that amount because I simply didn't have it available as spending money. How would that help anyone or improve the economy?
And that's not including the loss of revenue from people who simply refuse to pay more for products and services, so stop buying things they don't absolutely need. So with lower sales comes long-term staff layoffs or reduced hours (and staff with reduced wages can't afford to buy as much, either). Either way, the HST would not benefit me - it would seriously hurt me, and my staff. As it will hurt pretty much everyone in Ontario, except perhaps the MPPs who passed it without allowing any significant public input into the legislation.*
Plus it would cost me (and every other business) 8% MORE to buy goods and services, a cost that would have to be passed on to the consumer. Transportation costs will increase, too, because gasoline will be taxed more. So it's not simply an 8% increase for businesses, it's 8% plus another 8% on the shipping fees. You really think people will buy more when they have to pay more? That's such a bizarre idea that it comes straight from Alice in Wonderland.
Given that most retail outlets make 3-5% profit in the best of times**, how could any business lower prices after the HST without losing money? How can any small business survive without finding cuts in other areas, like staff? How can staff afford to but more when their hours are cut?
It will affect us personally when - or rather if - we go on vacation next year. We always used to fly out of Toronto. Stay in a Toronto hotel the night before, have a good meal, then get an early morning plane. Next year we're staying in Buffalo and flying out of the USA! So instead of Ontario getting the (admittedly small) money from our stay, it'll go to the USA. If we lived closer to the border, I'd be shopping in the USA for groceries and other goods every week, too. As will, I suspect, many residents in our border communities. McGuinty will make cross-border shopping a necessity, not merely an adventure.
The Enterprise-Bulletin's editorial - Voters can take care of HST at the polls - notes,
I realize it's hard for an MPP to feel empathy with someone making $10 an hour. When you're raking in $120,000-$209,000 a year from the public trough, it's difficult to feel any sympathy to the hundreds of thousands of Ontarians who work in retail, in the hospitality sector, in the minimum wage jobs that have replaced the dwindling industrial sector. It's hard to realize how hard your arbitrary and authoritarian taxes are on people on fixed incomes, on people without government pensions.
Yes, the EB is right: the election next year will be about the HST. And whoever promises to repeal it has my vote.
~~~~~~
* One day of public input was all McGuinty would allow, and even that was ignored. Were he not Liberal, I would swear he's taking lessons from our Mayor!
** According to the Retail Council of Canada. McGuinty and his cronies obviously don't read retail statistics. Nor do they care.
So did delayed closing costs, gym memberships, landscaping and airline tickets. Obviously the province wants you to be fat, stay at home and have an ugly lawn. It's that or pay their toxic tax.
And toxic it is.
Think about all those seniors who travel to Florida, Arizona and Mexico in the winter. A $1,000 round trip will cost them $80 more, or $160 for a couple. For people on a fixed income who scrimp and save for their annual vacations, that's a lot of money the government is taking from you. And what does the government give back in return?
That's right: you have MPPs with $100,000+ salaries and golden pensions. No tax cuts, no relief for pensioners. Gimme, gimme, gimme is the government's mantra.
As noted in the Packet and Times this week,
Quote
As of July 1, the 13% HST will apply to gasoline, energy, lawyer and accountant fees, haircuts and a number of other services previously exempt from provincial sales tax.
(Progressive Conservative leader Mike) Hudak said the combination of HST, the May 1 12% hydro rate hike and other new fees means the average annual cost of electricity for an Ontario family will grow by $350 in one year.
(Progressive Conservative leader Mike) Hudak said the combination of HST, the May 1 12% hydro rate hike and other new fees means the average annual cost of electricity for an Ontario family will grow by $350 in one year.
And that's just energy. A lot of those things you were used to paying the 5% GST on will be taxed at 13%. (Let's also keep mind mind that Ontario Hydro posted a 12% rate increase this year, in good part thanks to the bloated salaries of Hydro One execs...)
$350 is a week's salary - before taxes - for anyone making minimum wage.
The HST will be enough to make people reconsider some big purchases like homes (not to mention voting for the Liberals in any future election). Those $300,000 condos you've been looking at, with a eye to retiring here? Add another $24,000 to the price. And those $600,00-$750,000 waterfront condos: add another $48,000- 60,000! Oops! Better consider staying where you are, at least until the government changes and the HST gets repealled.
The HST will seriously hamper home sales in Ontario. But take heart: condos in Florida are still selling below their real value! McGuinty is now the Florida real estate industry's best friend.
And will that tax improve productivity, the economy, or business success? No. It will simply drain the life out of Ontario.
What really amazed me was not that the McGuinty government is sucking the lifeblood out of low-to-middle income earners, but that they lied so egregiously about it. The press releases from the Liberals said it would be good for business. It would give businesses more money. It would allow businesses to hire more people. And that consumers would benefit from lower prices.
Huh? That's so bald-faced it makes me stutter. The government makes this wildly illogical assumption that companies will lower their prices to compete, thus encouraging growth and consumer sales. Proof that McGuinty lives in a bubble, protected from the negative effects of reality. Most Ontario manufacturers are already stressed by competition with China and its cheap goods. Most Ontario businesses were hurt by the recession. Adding tax es HURTS them, not helps them. Maybe if McGuinty had to work in a Wal-Mart for a year he might understand. Maybe if he had to shop in one, he'd understand.
It might not have been so hard to swallow had they told people the province needed the tax to pay for rising health care and education costs. Had our Tammany-Hall MPPs taken a salary cut, we would probably have born it stoically. But MPPs kept their salaries and simply raised taxes while saying how it would help us! George Orwell's newspeak at its most proficient!
I estimated that for my former retail store, it would cost at least $750 to have a technician reset the cash register to put HST on all the items that didn't have it. Plus I would have to pay my bookkeeper to adjust my accounting software. Plus the compensation we got from collecting the PST (5% of the total) was taken away. For me, that was more than $500 a year. Gone, no compensation.
I figured that my little store would have to shell out at least $1,500 to make the switch. And every year I'd lose that $500, not just in year one. Imagine what a big box retail store will lose!
And will those stores eat the loss or pass it along? Of course: you, the consumer will pay more to compensate for that loss. Jobs will be lost, or cut back, too. Thanks to the HST.
As a small business, I figured I would have to LAY OFF staff or reduce their hours to recoup that amount because I simply didn't have it available as spending money. How would that help anyone or improve the economy?
And that's not including the loss of revenue from people who simply refuse to pay more for products and services, so stop buying things they don't absolutely need. So with lower sales comes long-term staff layoffs or reduced hours (and staff with reduced wages can't afford to buy as much, either). Either way, the HST would not benefit me - it would seriously hurt me, and my staff. As it will hurt pretty much everyone in Ontario, except perhaps the MPPs who passed it without allowing any significant public input into the legislation.*
Plus it would cost me (and every other business) 8% MORE to buy goods and services, a cost that would have to be passed on to the consumer. Transportation costs will increase, too, because gasoline will be taxed more. So it's not simply an 8% increase for businesses, it's 8% plus another 8% on the shipping fees. You really think people will buy more when they have to pay more? That's such a bizarre idea that it comes straight from Alice in Wonderland.
Given that most retail outlets make 3-5% profit in the best of times**, how could any business lower prices after the HST without losing money? How can any small business survive without finding cuts in other areas, like staff? How can staff afford to but more when their hours are cut?
It will affect us personally when - or rather if - we go on vacation next year. We always used to fly out of Toronto. Stay in a Toronto hotel the night before, have a good meal, then get an early morning plane. Next year we're staying in Buffalo and flying out of the USA! So instead of Ontario getting the (admittedly small) money from our stay, it'll go to the USA. If we lived closer to the border, I'd be shopping in the USA for groceries and other goods every week, too. As will, I suspect, many residents in our border communities. McGuinty will make cross-border shopping a necessity, not merely an adventure.
The Enterprise-Bulletin's editorial - Voters can take care of HST at the polls - notes,
Quote
Ontario's New Democrats have used a Statistics Canada database to calculate the average Ontario family will pay $794 more in taxes to every year because of the HST -- if businesses don't pass on their savings to consumers -- and $638 a year more if businesses do cut prices to reflect lower taxes.
But McGuinty says other studies show low-income families will be better off with the HST because of income tax cuts and government rebates, and it would be a wash for middle-income households.
The wealthy would pay more taxes.
About all Ontario residents can do now is see how it shakes down, and vote accordingly in the 2011 election.
But McGuinty says other studies show low-income families will be better off with the HST because of income tax cuts and government rebates, and it would be a wash for middle-income households.
The wealthy would pay more taxes.
About all Ontario residents can do now is see how it shakes down, and vote accordingly in the 2011 election.
I realize it's hard for an MPP to feel empathy with someone making $10 an hour. When you're raking in $120,000-$209,000 a year from the public trough, it's difficult to feel any sympathy to the hundreds of thousands of Ontarians who work in retail, in the hospitality sector, in the minimum wage jobs that have replaced the dwindling industrial sector. It's hard to realize how hard your arbitrary and authoritarian taxes are on people on fixed incomes, on people without government pensions.
Yes, the EB is right: the election next year will be about the HST. And whoever promises to repeal it has my vote.
~~~~~~
* One day of public input was all McGuinty would allow, and even that was ignored. Were he not Liberal, I would swear he's taking lessons from our Mayor!
** According to the Retail Council of Canada. McGuinty and his cronies obviously don't read retail statistics. Nor do they care.
