Tuesday, November 17, 2009

Ontario makes Campbell look bad on HST

It was a dramatic tale of two different approaches to governing this week.
In Ontario, the government introduced HST legislation Monday, setting out the details of the new tax which will take effect July 1, as it will here.
The plans include other big tax cuts and a promise that the total government tax take will fall by $7.7 billion over the next four. Families will get a $1,000 rebate to cover the added costs. Seminars are already underway around the province for businesses.
In B.C., the legislation won't be introduced until next spring. The government acknowledges families will face higher taxes, with much smaller offsetting reductions.
And poor Finance Minister Colin Hansen couldn't even say Monday whether school districts would get funding to cover some $40 million in extra costs because of the harmonized sales tax.
Two governments, heading in the same direction, but in very different ways.
Both know voters will find the new tax tough to swallow. Only Ontario is making much of an effort to win them over.
You could argue that the Liberal government in Ontario is buying support with other tax cuts. This week, it announced HST exemptions for fast food under $4 and newspapers. But seminars on the new tax for small business, in their communities, are simply good, competent government. Clear rules well in advance of implementation help everyone.
The Campbell government is looking inept, or indifferent, in comparison.
That's not good. The Liberals promised, in writing, not to introduce the HST during the May election campaign - and then did just that. Hansen's claim the tax was "not even on the radar" during the campaign makes the decision to introduce it a few weeks later look reckless and ill-considered.
Here's the primer on the HST. It's a new tax that will combine the seven-per-cent provincial sales tax and the five-per-cent GST. For many items, adult clothing for example, there is no net change.
But the GST applies to more things than the provincial sales tax. Provincial governments introduced exemptions, like no PST on bicycles to promote health. Services, like cable or child care, attracted GST but not the provincial tax.
Under the harmonized tax, the GST rules take precedence. A lot more things will be taxed.
The GST also lets businesses deduct the sales tax they pay for inputs. Treating the PST the same way will save B.C. businesses about $1.9 billion. Individuals and families will pay more to offset the business tax break.
The theory is that companies will pass the benefits on in lower prices and B.C. will be more attractive for businesses investors because of lower tax costs.
The provincial government has not been forthcoming with information on what it means for families.
But TD Economics, the analytical arm of the big bank, has released a special report on the tax that offers a useful starting point.
Individuals and families will pay more, the report concludes, as "The tax burden will shift from businesses to consumers."
The TD Economics analysis estimates about 20 per cent of British Columbians' expenditures will now face an additional seven-per-cent tax.
An average household will pay an extra $840 in taxes. But the analysis also projects that businesses will pass on some of the savings from reduced taxes to consumers. That will cut the actual net increase in costs to $400.
The TD Economics report favours the harmonized tax. It's more efficient, it says, and will help Canadian businesses compete for domestic and international markets, the report said.
And the B.C. government continues to cite to the need to offer tax breaks to the forest industry and other big businesses.
But as the legislature finance committee found in its budget consultations, the public isn't buying it. The HST remains unpopular; most submissions said it should not be introduced.
Ontario's government faces the same backlash. But it's doing much more to inform people and try to win them over.
Footnote: The TD Economics' report says the tax will add about 0.7 per cent to the rate of inflation to the province, as the costs of consumer goods and services rise.


Anonymous said...

Once again another lack of effort on the part Willcocks. You might have mentioned that in Ontario the HST is going to be one full percentage point higher….it is somewhat easier to “rebate” more back if your take is bigger to begin. How you miss something as glaringly obvious when comparing Ontario HST to BC HST is beyond me.

You might also mention that in Ontario there is not going to an exemption on gasoline like there is here in B.C. How do you think it would appear if B.C. raised the HST rate a full percentage point (to match Ontario’s ) AND increased the price of gasoline as well as Ontario is doing by not exempting the HST ? You also failed to mention that Ontario is NOT exempting home heating either as B.C. is. Think that might make a difference Paul?

So in Ontario HST is a full percentage point higher; applies HST to home energy and gasoline as well (something that will be exempt here in B.C.) and according to you Ontario HST makes B.C. look bad ? Do you even take 5 minutes to research anything ? Do you not think the extra percentage point was worthy of at least a mention in your “article” if you were even looking to appear like a responsible journalist?

I do agree with you one point though your comment that “the public isn't buying it” is accurate. I submit in part because the public read very poorly researched articles like yours. Seriously if you are not prepared to do the work why not retire already ? No excuse for these kinds of oversights and I expect deep down even you know that.

Anonymous said...

Cmon Anon 8:22 PM.
Differences of detail and implementation ?
Bottom line, public arent buying it. NOT, because of shoddy journalism but because of the BC govt action (election lies) on this subject.

Now, begone PAB-bot...........

Anonymous said...

looks like paul w has got the attention of the pab spin weasels,

Anonymous said...

"I submit in part because the public read very poorly researched articles like yours"

Blame the media, blame the NDP, blame anyone but Gordo, right anon?

The public hates the HST because of Campbel's about-face so soon after the election. They hate it because it came with no warning and no consultation. They hate it because big business – who have dined out so well and so long under the Liberals – pay less while we all pay more.

Spin it anyway you like, anon, but we all know who's to blame for this one.

Anonymous said...

Sorry folks, but shoddy journalism is shoddy journalism. Fortunately Vaughn Palmer, by chance also happened to do a feature on this very same subject today. Only Mr.Palmer did it the right way and it the way.

It should be noted that Palmer mentioned the higher HST rate in Ontario right from the get go. Also noted the exemption differences between the Provinces as well. In other words Vaughn Palmer did the work and did not take the lazy way out as Willcocks did.

Honestly Willcocks I think you owe an apology to the people who paid you for that column.

Anonymous said...

"sorry folks, but shoddy journalism is shoddy journalism. "

A BC Liberal apologist is still a BC Liberal apologist.

I'm sure Paul is flattered you think he has so much influence with the public. Maybe you should take this up with his editor who obviously didn't think mentioning the difference was integral to the column, either.

The difference in HST between BC and Ont has been widely reported and well known for months. No matter how you want to spin it, the Liberals are wearing this mess because they were less than honest with the public on the HST and outright lied about their pre-election budget.

If you want blame a member of the media for the fallout, good luck with that. Judging by the comments so far, I don't think you're getting much traction.

Anonymous said...

“HST is not on our radar”. -Colin Hansen, election May 2009. HST starts July 1 (Happy Canada Day!) 2010