This is not the time to raise taxes
By MPP Toby Barrett

This is not the time to raise taxes.

The wheels have fallen off Ontario’s economy, in part, because of mismanagement and out of control spending.

Regrettably this government’s solution is to dig deeper into taxpayers’ pockets with the Harmonized Sales Tax (HST), or as it has become known -- the Dalton Sales Tax (DST).

For example, rental fees at ice rinks, baseball diamonds and soccer fields will increase by eight per cent next July. Minor sports associations will have to cover the extra operating costs, forcing many of them to pass the costs on to parents. For a family with two, three or more kids playing, the new tax hike could be prohibitive. 

Many kids are already sidelined because their parents cannot afford the expense of sports. The DST will make it even more expensive for families to afford hockey, figure skating, baseball and soccer. Hence, families are visiting www.daltonsalestax.com to sign a petition against this new tax.

The hands of those in the insurance industry will also be tied with Ontario’s move to harmonize the federal and provincial tax into a single 13 per cent DST. This will hit insurers’ bottom line to the tune of $300 million. 

Insurance Bureau of Canada president and CEO Don Forgeron has indicated that even though the blended tax won’t take effect until next July, insurers will get hit for 2009. “The issue is prior claims — claims already on the books,” he said. “Insurers will have to adjust reserves to account for the additional 8% they have to add to claims costs. “It’s a $300m hit that insurers have no ability to recover because those premiums have already been collected.”

While both inside the Legislature and out, government is defending the tax grab, it appears the costly impact of the combined sales tax is getting a failing grade from consumers and businesses alike.

Canadian Federation of Independent Business (CFIB) Ontario Director Satinder Chera has gone as far as stating, “Governments have clearly dropped the ball in their handling of this critical tax reform initiative,” adding that “the decision to finalize the terms and conditions of the HST, without public consultation, has generated mixed reviews and serious concerns within Ontario’s small business community.”

The CFIB is asking that the final agreement on harmonization include a reduction in the combined tax rate and an increase in the small business transition tax credit to match the cost of implementing the DST.

The Ontario Real Estate Association (OREA) estimates the McGuinty government’s plan to harmonize the GST and PST will add over $1,500 to the cost of an average real estate transaction, hurting the resale home market and prolonging the housing industry’s recovery from the current downturn. “Now is not the time to be erecting barriers to homeownership,” said Pauline Aunger, President of the OREA. “We need consumers to invest in housing to help get our economy going again.”

So it seems that in haste, Mr. McGuinty may be doing more harm than good. Why not take the time to consult with professionals who understand the impact of this hike on Ontario consumers and businesses? Ontarians are angered by the lack of consultation, and many may end up shopping elsewhere.