The ineffective online petitions, preemptive purchases and even gas station fist fights are over and, as promised, Ontario’s Harmonized Sales Tax is here.
Starting Thursday, the five per cent federal goods and service tax and the eight per cent provincial sales tax will merge.
Consumers will now pay 13 per cent tax on many purchases that were previously PST exempt – things like funerals, internet access, haircuts, gym memberships, heating and electricity and new home purchases over $400,000.
Melissa McPhee and her partner recently eked out a deal on their first home, a $550,000 two-storey house in Mississauga, saving thousands in lawyers' fees. But it will cost them more than expected for renovations, landscaping and utilities.
"It's pushing home ownership out of the grasp of younger adults who are just coming into the working world," said the 31-year-old veterinarian. "It does hurt significantly."
But 83 per cent of items and services in the province won’t be subject to the additional tax.
Some items are exempt from the provincial portion of the harmonized tax, including children’s clothing, books, resale homes, feminine hygiene products and prepared foods under $4.
Other items are exempt from the HST altogether, including child care services, basic groceries, residential rent and music lessons.
Ontario Premier Dalton McGuinty says the HST will cut costs for businesses because it will eliminate the tax paid at every step of production. He figures those outlets will then pass their savings on to consumers.
The HST also kicks in on Thursday in British Columbia. Quebec, Nova Scotia, New Brunswick and Newfoundland and Labrador already have the HST in place.
Critics say it’s an outright cash grab and the government should not be increasing prices while the economy is still shaky.
With files from the Canadian Press
What's taxable and what's not under the HST