For months now opposition parties at Queens Park have tried to paint the installation of the Harmonized Sales Tax as a "McGuinty Tax Grab" and have failed to mention the positive things it will do to Ontario's and Canada's economy.
To fully understand the HST proposal you must first understand the type of taxation process that we have in Ontario today. Right now when a company buys a product that company pays provincial sales tax. When that company sells that product to a store that store pays provincial sales tax which is best described as a tax on a tax. This in turn drives up the price for consumers because we are left paying extra because of this multiple tax. With the installation of the HST this process will be removed and the tax will only be payed at one level; the consumer. This is what has Conservative and NDP opposition members in a rut. When the HST is implemented prices on certain goods will increase but this will be very temporary. This is a major reason why many people are opposed to the HST because they do not understand the tax itself or how the price will be lowered. In July of 2010 (when the HST will be implemented) the tax will immediately shock the system causing minor increases in prices of goods. However, it will not take long for businesses to realize that they can sell their products for a lower price and still make a profit. All it takes is ONE business to lower their price and it will instantly send a ripple effect through that specified market and the price of that good will decrease. To use the eastern provinces of Canada as an example, after they implemented the HST, prices began to lower after a few months; much faster than opposition members would have you believe.
Although opposition members have publicly stated that they are fully against the HST the former interim leader of the Provincial Conservatives Bob Runciman stated otherwise. “We’re in favour of reviewing the impacts of harmonization, the benefits of harmonization, the timing of harmonization. In principle, we think it’s something that should occur.” In addition the newly elected leader of the Provincial Conservative party MPP Tim Hudak, when asked about the HST responded “In the manufacturing sector, the problem with the PST is it cascades, so every step along the way there’s tax on tax on tax, which raises the cost of goods and particularly punishes exporters. So we understand how that can help the economy.” Despite what the Conservatives would have the public believe they know this is a good thing for Ontario. “This is jobs, this is investment, this is good economic policy." (March 27, 2009) – Jim Flaherty (Canada's Finance Minister)
To fully understand the HST proposal you must first understand the type of taxation process that we have in Ontario today. Right now when a company buys a product that company pays provincial sales tax. When that company sells that product to a store that store pays provincial sales tax which is best described as a tax on a tax. This in turn drives up the price for consumers because we are left paying extra because of this multiple tax. With the installation of the HST this process will be removed and the tax will only be payed at one level; the consumer. This is what has Conservative and NDP opposition members in a rut. When the HST is implemented prices on certain goods will increase but this will be very temporary. This is a major reason why many people are opposed to the HST because they do not understand the tax itself or how the price will be lowered. In July of 2010 (when the HST will be implemented) the tax will immediately shock the system causing minor increases in prices of goods. However, it will not take long for businesses to realize that they can sell their products for a lower price and still make a profit. All it takes is ONE business to lower their price and it will instantly send a ripple effect through that specified market and the price of that good will decrease. To use the eastern provinces of Canada as an example, after they implemented the HST, prices began to lower after a few months; much faster than opposition members would have you believe.
Although opposition members have publicly stated that they are fully against the HST the former interim leader of the Provincial Conservatives Bob Runciman stated otherwise. “We’re in favour of reviewing the impacts of harmonization, the benefits of harmonization, the timing of harmonization. In principle, we think it’s something that should occur.” In addition the newly elected leader of the Provincial Conservative party MPP Tim Hudak, when asked about the HST responded “In the manufacturing sector, the problem with the PST is it cascades, so every step along the way there’s tax on tax on tax, which raises the cost of goods and particularly punishes exporters. So we understand how that can help the economy.” Despite what the Conservatives would have the public believe they know this is a good thing for Ontario. “This is jobs, this is investment, this is good economic policy." (March 27, 2009) – Jim Flaherty (Canada's Finance Minister)
In addition, the Canadian federal (Conservative) government is in complete support of the implementation of the HST in Ontario and are working actively with the Provincial government to help ease in the harmonization. After learning about Ontario moving to a harmonized tax, British Columbia decided they would as well. The federal Conservative government is also working with British Columbia to help implement the HST. The question you have to ask yourself is would politicians of two different ideologies in all different parts of the country implement a tax that is bad for the citizens of Ontario, B.C. and Canada as a whole? The answer is a resounding NO! The politicians in Ottawa and Toronto are there because we chose them to represent us. They are making a choice to implement the Harmonized Sales Tax because it is the right thing to do. Premier Dalton McGuinty has also instituted a PERMANENT income tax cut for 93% of Ontarians to help ease in the HST, something that B.C. is not doing.
A small increase in the price for our coffee is definitely a pain worth enduring. The HST doesn't just effect you it will effect your children and your grand children. It will make Ontario a more competitive, economically strong, and a great place for businesses to move. The HST will help Ontario greatly and it is up to us to bear the temporary hardship in order for our youth to experience and grow in a strong Ontario economy.
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