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McGuinty Mulls Harmonized GST And PST That Would See You Pay More In Taxes

01/23/2009  | CityNews.ca Staff

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McGuinty Mulls Harmonized GST And PST That Would See You Pay More In Taxes

You know about the GST.

You've certainly paid the PST.

Are you ready to dole out for the HST?

It stands for harmonized sales tax and it currently exists in Quebec, New Brunswick, Nova Scotia, and Newfoundland and Labrador. And you could one day be paying it in Ontario.

It's basically just what the name implies, a combination of both the provincial and federal tax that's levied on almost anything you buy here. Premier Dalton McGuinty admits he's toying with the idea of making the move in this province - although a lot depends on what the federal government does in next week's long awaited budget.

McGuinty claims his government will take a "long hard look" at the idea, especially if the Harper Tories provide enough support to make it worth our while.

Businesses are all in favour of the move, which they believe will make them more competitive, ease their paperwork, offer them more tax breaks, and save them about $100 million a year.

But the Liberals aren't quite as hot on the idea, worried it will reduce the amount of money coming into their coffers.

And what about you? Moving to the HST would likely raise prices for consumers because some items that are exempt from provincial taxes would suddenly be applied to them. The result: you pay more.

That's what residents of Nova Scotia discovered in the first year of their not-so-harmonious harmonized tax. A study showed citizens there paid an extra $84 million for the privilege.

McGuinty insists he still hasn't ruled out the idea and will know more when the budget comes down on Tuesday.

But the harmonization plans may be the least of your worries after next week. There's a chance the feds' financial planning could result in the government falling, plunging us into yet another leadership crisis.

The Conservatives have already leaked at least one aspect of their plan to get us out of the economic doldrums. They'll go $64 billion in debt over the next two years to try and stimulate the economy, including a billion dollar fund to help retrain workers who've lost their jobs because of the monetary meltdown.

"We're looking at $1 billion across the country for community investment," confirms Diane Finley, the Minister of Human Resources and Skills Development. "We're looking at $1 billion for a community adjustment fund. Any area that's been hard hit is going to be eligible to apply for funding under this."

The NDP has already made it clear they'll vote against the document, without even knowing what's in it. That puts the future of Harper's minority mandate solely in the hands of new Liberal boss Michael Igantieff. And he's taking a wait and see attitude.

"Will it help the needy? Will it save jobs? Will it create the jobs of tomorrow? Will it be fair to all of Canada's regions? And will it burden our children with debt? Those are the questions a responsible opposition has to ask," he explains.

He won't be making any snap judgments about the budget. He doesn't intend to make up his mind about what to do until Wednesday.

If he doesn't like the answers and the government falls, the same problems that plagued us last month will return. Will a coalition take over on Parliament Hill? Or will Canadians be forced to spend another $300 million to spring for another election?

The answer to that one comes at 4pm Tuesday, when Finance Minister Jim Flaherty stands up in the no-longer prorogued Parliament and brings up a do-or-die document that will seal his party's fate - or guarantee they live on long enough to put it into effect.

CityNews will have extensive coverage of the key vote at CityNews at Five and Six.

 
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