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No Breaks for Business with HST

Stop the DST (Queen's Park Report - August 8, 2009) Across Ontario, there has been a very real sense of backlash in the months and weeks since the Dalton Sales Tax was announced. It seems that every time we had thought we heard the last of it, a new bombshell is dropped by the McGuinty government. Well folks, this time the work of my colleagues, PC Finance Critic Norm Miller (Parry Sound-Muskoka) and MPP Norm Sterling (Carleton-Mississippi Mills) have uncovered yet another major discrepancy in the McGuinty government’s claims that the new sales tax will be good for businesses.

Despite earlier declarations that the sales tax would reduce taxes on business, it seems that the McGuinty government negotiated a deal which will cost businesses up to $3.5 billion over the next three years by denying promised tax breaks. This can be found in the Memorandum of Agreement with the Federal Government, which states that the McGuinty Liberals could deny input tax credits for five years and then phase out these restrictions over an additional three years.  According to the Budget Impact Summary table on page 134 of the 2009 Budget, these Input Tax Credit Restrictions will mean businesses will be paying $905 Million in 2010/11, $1.26 Billion in 2011/12 and $1.31 Billion in 2012/13.

At last weeks Estimates Committee, Mr. Miller and Mr. Sterling questioned the Finance Minister on the major discrepancy. Mr. Sterling asked Minister Duncan if he was misleading businesspeople by saying in one part of the budget that they would receive a tax credit for the taxes they paid on purchases, and then denying it for some businesses and expenses in another part of the budget. Duncan and his Assistant Deputy Minister dodged the question, indicating that Sterling’s conclusions were correct. It was then revealed that this tax grab from businesses will be used to fund the McGuinty government’s promised corporate income tax cuts, demonstrating this government’s slight of hand tactics.

As mentioned earlier, it seems that every time we turn around there is a new revelation in this government’s shameless attitude towards taxation. At a time when Ontarians are already feeling the pinch through no fault of their own, the McGuinty government feels no shame in raising taxes even higher. The fact that now even businesses will likely see no immediate benefit from harmonization makes my colleagues and I in the PC Caucus wonder why McGuinty feels this is the right time to further pressure hardworking Ontarians through another major tax grab.

Clearly, until Ontarians stand up to the Mr. McGuinty’s tax hikes nothing will change. With that in mind, I ask you to help the PC Party fight against the proposed harmonization of the GST and PST through three easy steps. First, go to www.jimwilsonmpp.com and complete, and return the HST petition to my office. Second, write the Premier directly and ensure your voice is heard by the government. Third, talk to your friends and neighbors and let them know the harmful effects this new tax will have on all of us.

Most certainly, the middle of an economic downturn is no time to further tax hardworking Ontarians through an ill advised tax grab such as this. I look forward to hearing from you in regards to this new McGuinty tax grab.


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