HST – The most important tax reform in a generation

Posted: February 4, 2010 in 1
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On July 1, 2010, Ontario is implementing the most important tax reform in a generation. It’s a big change that will make a big difference, resulting in more jobs and greater prosperity.In fact a recent report found that as a result of the comprehensive tax package, Ontario will see 591,000 net new jobs within ten years. Maybe that’s why more than 140 countries already have a similar value-added tax system, and many experts say it’s the right move for Ontario.

In a nutshell:

  • The harmonized sales tax (HST) is just one part of a comprehensive tax package that would also provide, over three years, $10.6 billion in direct payments and permanent tax relief to the people of Ontario and $4.5 billion in tax relief to businesses.
  • Consumers would not have to pay the Ontario portion of the HST on some items currently exempt from RST – children’s clothing and footwear, diapers, kids’ car seats and booster seats, books (including audio books) and feminine hygiene products.
  • As under the federal Goods and Services Tax, the HST would not be charged on items such as basic groceries, prescription drugs and medical devices.
  • The HST would result in the removal of $4.5 billion a year in embedded sales taxes when fully phased in.
  • How will the HST benefit consumers?

    Some purchases will likely cost more under the new HST. However, 83 per cent of consumer purchases will not see a new tax. In fact, on a number of items, prices will eventually come down.

    The HST will not be charged on the following items that are currently not subject to PST:

    • Basic groceries
    • Prescription drugs
    • Certain medical devices
    • Child care
    • Residential rents
    • Municipal public transit
    • Most health and education services
    • Legal aid
    • Most financial services
    • Tutoring
    • Music lessons

    Consumers will not have to pay the provincial portion of the HST for:

    • Qualifying prepared food and beverages sold for $4.00 or less
    • Print newspapers
    • Children’s clothing and footwear
    • Children’s car seats and car booster seats
    • Diapers
    • Feminine hygiene products
    • Books (including audio books)

    Buyers of new homes will receive a rebate of up to $24,000 regardless of the price of the new home.

    • Buyers of new residential rental properties will receive a similar rebate
    • The HST will not apply to purchases of resale homes.

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