Tuesday, October 27, 2009

Politics: The HST Will Hit Renters, Too

Parkdale-High Park Member of Provincial Parliament Cheri Dinovo spoke at Swansea Town Hall on 27-October-2009

TORONTO, ONTARIO - I've mostly kept silent about the upcoming implementation of the HST, or Harmonized Sales Tax, that will occur next July in the province of Ontario. While it is a regressive tax, in a time of deficits and as a general believer in appropriate taxation, I did not think it appropriate to take a stand against a tax. Also, while all Goods and Services Taxes are fundamentally regressive, they are also a tax on consumption, which in an environmental era strikes me as an appropriate thing to be doing; rather than not have a HST, I would like to see the costs that poor and middle class people incur because of the HST be accounted for in reduced income taxes in their tax bracket. Granted, Ontario is not doing that in its implementation of the HST (at least on a permanent basis), but that still wasn't enough to get me upset.

The HST will have items that are currently not subject to the Provincial Sales Tax but are subject to the Federal Goods and Services Tax be subject to the Harmonized Sales Tax including both rates. Thus, the tax will affect me. Items such as Internet access, postage stamps, prepared foods under $4, and many services will all cost 8% more than they do now, and depending on my tax bracket in 2010, it's extremely unlikely that I will come out ahead.

Trinity-Spadina Member of Provincial Parliament Rosario Marchese spoke at Swansea Town Hall on 26-October-2009

This evening, my local Member of Provincial Parliament for Parkdale-High Park, Cheri Dinovo, held a town meeting mostly informing condominium owners about how their condo fees will be going up by 8% as a result of the HST. Since his riding has more condominiums, her colleague from Trinity-Spadina, Rosario Marchese, spoke to the issue at length, whereas Dinovo mostly focused on the HST itself.

What I did not realize until this evening is that as a result of the HST, landlords will be able to claim an extraordinary circumstance and apply to raise their rents by the amount that the HST is costing them, and there is no question that the requests will be granted. While not all rent money goes to services currently exempt from provincial taxes so the increase would not be 8%, depending on circumstances it might be quite high, on the order of 4-5%. So, renters may actually be hit more than even condo owners as a result of the HST. Nobody in the media seems to be talking about that.

Still, for the same reasons that I've held all along, I remain unconvinced that I really want to oppose the HST--I'd rather work on making the income tax more progressive, particularly at the high end.


HST Facts said...

We all have friends and neighbours who have been hard hit by this recession. This is why the NDP and the Conservatives have been calling for action on the economy. And that is why the government introduced the HST – to create jobs.

The Toronto Dominion Banks says the HST will reduce cost of doing business in Ontario by roughly $5.3 billion and that the majority of these savings will be passed on to customers within the first year.

The majority of items we purchase - 80 percent – will see no tax change at all. TD estimates prices, before tax, will fall by almost 1 percent. And, studies looking at the Atlantic Provinces found that consumer prices fell following harmonization.

Ontario needs jobs – it’s time to stop playing politics.

Glitch said...

HST Facts, could you cite the studies that supposedly show consumer prices fell following harmonization? It seems to me the only way they actually went down is because the PST was reduced to make the HST revenue-neutral. That isn't happening in Ontario.

I'm not opposed to the HST, but it seems to me there are a lot of false arguments being put forward by both sides.