The HST and Me!

Well, folks, it is almost upon us. In just over a week, Ontario will be subjected to the horror demon spawn that is the HST.

(That was sarcastic, by the way. I feel like I need to clarify because some people are actually talking about it in those terms.)

First, an explanation. HST stands for Harmonized Sales Tax, which basically means that the current Ontario sales taxes, the PST (Provincial Sales Tax) at 8% and the GST (Goods & Services Tax, federally controlled) at 5% will be combined. So instead of having an 8% PST and a 5% GST, most items will be sold with a 13% HST.

The issue is that while you get charged GST on just about everything, PST is a little more selective. One of the original incentives of the PST system was to encourage healthy living and to make the necessities of life more affordable. So, for example, PST is charged for junk food but not produce, and for adult clothing but not children's clothing. With the HST, some things that were formerly only taxed 5% will now be taxed 13%. This is supposed to shift the tax burden off the shoulders of corporations and onto the consumer, allowing the corporations to lower their prices.

The Maritime provinces harmonized their sales taxes in 1996, and some reports state that the price of goods did go down. Currently both Ontario and British Columbia are preparing to harmonize their sales taxes, and the public is not very receptive. While Ontario Premier Dalton McGuinty did consult with Ontarions before working towards harmonization, BC Premier Gordon Campbell apparently did not extend the same courtesy to his constituents.

In both provinces, the public and the media have come out strongly against HST. In BC, residents have been circulating a petition which could force the issue to referendum (it needs the signatures of at least 10% of the registered voters of every riding to do so), and a provincial cabinet minister resigned from his position and from the Liberal Party because his riding is so strongly opposed to the HST. In Ontario, Premier McGuinty "has taken to the airwaves in an 11th hour bid to sell the merits of the harmonized sales tax," as that byline goes. Basically he appeared in a 60-second spot talking about how awesome the HST would be for employers. This appeared, interestingly, on the 6 o'clock news yesterday throughout Ontario, except in Ottawa, the location of the federal government and McGuinty's own riding.

Now, I am generally not against taxation. I think of it as a good thing--it keeps our roads paved and our health care universal. However, the concept of moving the tax burden from the corporation to the consumer seems more than a little suspect to me, so I hunted up the Ontario Ministry of Revenue handy-dandy guide to tax change, which my right-wing grandfather forwarded to me almost two months ago along with an email petition to stop "the dreaded HST."

And so, without further ado, How the HST will affect Me:

Clothing and Footwear

No change except in dry cleaning service and children's footwear below size 6. Well, since I've never had anything dry-cleaned in my life and have no kids, looks good.

Food and Beverages

No change except to alcoholic beverages, which actually goes down. I considered this fortuitous until I checked out the footnote, which informs me that other taxes will be charged on alcohol to make up the discrepancy and "continue to support social responsibility." Tcha.

Home Services

Taxation goes from 5% to 13% on cleaning services, electricity and heating, internet access services, home service calls by tradespeople, and landscaping, lawn-care and private snow removal. Well, I don't use cleaning services, my heating is included in my rent, and the supers take care of repairs and snow removal. And I have a lease contract so they're not allowed to raise my rent.

So, for me, tax increase in: internet access service, electricity

Accommodation, Travel and Passenger Transportation Services

Taxation goes from 5% to 13% on hotel rooms, taxis, campsites, and domestic air, rail and bus travel originating in Ontario. Well, hotels and taxis are already ridiculously expensive so I try to avoid them as much as possible anyway. I don't camp much anymore, rarely bus, and only travel by air when absolutely necessary.

So… train travel.

Around the House

Taxation goes up on magazines purchased by subscription and home renovations. I can't renovate my apartment even if I wanted to, and my only magazine subscription is just about to expire, so I think I'm good.

Motorized Vehicles

Well, I don't have a car. But the only changes are to private resale of car and gasoline/diesel so I guess the cost of bus passes will go up.

Home Purchases

The tax is increasing on new homes over $400,000 (although if they are primary residences they are eligible for some kind of housing rebate, apparently, which covers most of the cost) and on real estate commissions.

Health Products and Services

Here we have the caveat that audiologist, chiropractor, and physiotherapist services will remain tax-free "if offered by a practitioner of the service." Honey, if you're getting chiropractic work done by someone who's not a chiropractor, you're going to have bigger issues than having to pay taxes.

Also, tax increases for massage therapy services and vitamins.

I do take vitamins.

Memberships, Entertainment and Sport Equipment

Here we have some interesting changes. The tax for admission to professional sporting events and for movie tickets is actually going down from 15% to 13%. Green fees for golf, gym membership fees, sports lessons, and tickets for live theatre (small venue) are going up (with some exceptions, such as sports lessons for kids with disabilities, and theatre for charity events). Alright. So I do attend professional sporting events (like maybe once a year) and movies. I also go to the theatre, and sometimes I pay for a gym membership.

So, theatre tickets and gym membership up, pro sporting events and movie tickets down.

Lessons and Rentals

Hockey rink and hall rental fees are going up.

Electronics

No change.

Professional and Personal Services

Tax is increasing for the services of a fitness trainer or hair stylist/barber, aesthetician services, funeral services, and legal fees. Barring exceptional circumstance (aka as long as I don't get arrested or sued), the only one of these I use is the hair stylist.

Tobacco

Tax goes up. I don't smoke, so it's all good.

Bankins and Investments

No change.

Ontario Government Services

Tax is up on hunting and fishing licences. Yeah… no.



Results

With HST, I am going to be paying more for:
internet, train travel, electricity, vitamins, theatre tickets, gym memberships, hair cuts

With HST, I am going to be paying less for:
pro sporting events, movie tickets

According to my estimates for how much I currently spend on those things, tax increases will cost me about $77 annually, and tax decreases will save me maybe $5 a year.

If prices remain the same, the HST will cost me personally (poor university student!) about $70 a year. Taking into account pension plan and employment insurance reductions, that's about one work day (7.5 hours) on Ontario minimum wage.

However, this entire system is predicated upon the assumption that shifting the tax burden will lower prices. If that's the case, since the average Ontario family is expected to pay an extra $450 a year in sales tax once the HST comes out, maybe I will get off easy?