Ontario's Harmonized Sales Tax

There he goes again, the premier who campaigned on a solemn promise of no raise in taxes and sound fiscal management. Well, he got elected, partially on the basis of that promise, partly because the previous Conservative-led provincial government had eked out the last of Ontarians' patience with their social service cut-backs, and didn't he surprise everyone when he imposed a tax on health care, giving the people of Ontario the splendid opportunity to once again pay health premiums.

He has further eroded trust by the constant scandals of wastage of provincial funds raised through voters' taxes where one government department after another - name it, eHealth records for the province's health care plan, huge welfare over-payments, unveiled by the auditor general and illegal fees imposed through automated kiosks, to name several. And this, in a province which has slipped far behind its provincial counterparts; where once it was an economic powerhouse, now it begs, hat in hand, for equalization payments.

This has been a government unheedful of the need to preserve the administration funding it has, but one which - in healthier times before the economic slump and the loss of 100,000 manufacturing jobs - indulged in big-ticket spending, expanded programs where none were required, posting year-on-year surpluses, then sinking into a pathetic state of fiscal penury.
Now the taxpaying public has been warned it faces another hefty increase where government's fist digs deep into our pockets.

But the thing of it is, the HST, combining the GST with a provincial tax that gives business a break from the layered imposition of taxes, is likely a needed solution to a serious problem. Where businesses and manufacturers in the province have been paying a series of taxes (and passing those added expenses on to consumers) as a result of an ill-planned taxing scheme. Ontario's tax climate was seen as inimical to the attraction of new business. Now, the new combined tax will impose a further burden on taxpayers, while giving business a break.

So then, if manufacturers can produce goods that are less expensive, giving them a break in exports (they won't pass their decreased cost of production on to home consumers, alas) this can manifest itself in increased confidence, and a concomitant increase in the job force. The working poor will get tax refunds, as well as tax breaks, which will also be extended to the general population. A one-time cash sweetener will go out to all taxpayers.

Yes, the middle-class will end up paying more taxes, since a whole host of items that were previously excluded from taxation will now be taxed, and that will be painful, likely adding up to two thousand yearly in taxes for many middle-class consumers. On the other hand, if this manoeuvre is successful in giving new life to manufacturing and business in the province, ensuring a return of jobs, that too will be of value to all of us.

It's a bitter pill, but one we'd be best off swallowing. And hoping that the projections of financial experts won't prove to be a hopeful mirage....