As of July 1st, Ontario’s tax system is going to change with the introduction of the Harmonized Sales Tax, or HST.
You may have some questions about these changes, but there are three important things you need to remember when it comes to the HST.
The first thing you should remember is that, according to economists, the HST was the number one thing our government could do to help Ontario be competitive once more following the global recession.
The next important thing to remember is that the HST is part of a larger tax reform package, that included income tax cuts, cuts to business taxes, new tax credits, and transition cheques to help Ontarians with the transition as we move forward with the first major change to Ontario’s tax system in over 50 years.
And finally, you should also remember that most products you buy will see no new tax. In fact, 83 percent of the products and services you purchase will see no new tax.
If you already paid GST and PST on it, then the price is not going to change when the new HST takes effect. For these products, like cable and phone services, new cars and adult clothing, there won't be a change. What is different, however, is that on July 1, 2010, instead of paying 13 per cent tax to two different governments eight per cent provincial and five per cent federal), there will be one tax — still 13 per cent, collected by the federal government.
There are some other items now that have no sales tax on them, such as basic groceries, municipal transit and prescription drugs. On July 1, 2010, there will still be no HST charged on these items.
Other products will be eligible for a point-of-sale rebate for the provincial part of the HST. This means you will only pay the five per cent federal portion of the HST. These include print newspapers, books (including audio books), diapers, children's clothing and footwear, children's car seats and booster seats, feminine hygiene products, and qualifying prepared food and beverages sold for $4.00 or less.
Only 17 per cent of products and services sold will see a new tax, including things like personal and professional services such as hairstyling and legal fees, as well as energy costs including home heating fuel and electricity.
To find out what exactly what items HST will or will not apply to, visit www.ontario.ca/taxchange, or contact my Constituency Office at 416-630-0080.