Happy Birthday Canada, Happy HST Day Ontario & BC!

Happy Birthday Canada!
And for Ontarians & British Columbians, Happy HST day!

Effective Thursday July 1 2010, the governments of Ontario and British Columbia implemented the single harmonized sales taxes (HST).  The HST combines both the federal goods and services tax (GST) with their provincial sales taxes (PST). GST is 5%, while PST rates are 8% and 7% respectively.

Here are some of the changes listed below:

Clothing & Footwear:
– Dry cleaning service

Food and Beverages:
– Alcoholic Beverages (previously 5% GST + 10-12% PST)
Although sales tax on alcohol is decreasing, other alcohol fees and taxes are changing

Home Services:
– Cleaning Services
– Electricity and Heating (e.g., Natural Gas/Oil for Home)
– Internet Access
– Home service calls by Electrician, Plumber, Carpenter
– Landscaping, Lawn-Care and Private Snow Removal

Accommodation, Travel and Passenger Transportation Services:
– Hotel Rooms (previously 5% PST)
– Taxis
– Campsites
– Domestic Air, Rail and Bus Travel originating in Ontario

Around the House:
– Home renovations
– Magazines purchased by subscription

Motorized Vehicles:
– Private Resale of Car (including Registration)
Ontario will maintain the PST  on private transfers of used vehicles at a rate of 13 per cent.
– Gasoline/Diesel

Home Purchases:
– New Homes over $400,000 (and in the GTA of Ontario, and GVR of BC, most single detached homes are well over the $400k price tag).
– Real estate commissions

Health Products and Services:
– Massage therapy
– Vitamins

Memberships, Entertainment and Sports Equipment:
– Golf green fees
– Gym and Athletic Membership Fees
– Ballet, Karate, Trampoline, Hockey, Soccer Lessons, etc.
– Tickets for Live Theatre with Less Than 3,200 Seats

Leases and Rentals:
– Hockey Rink and Hall Rental Fees

Professional and Personal Services:
– Fitness Trainer
– Hair Stylist/Barber
– Esthetician Services (e.g. Manicures, Pedicures, Facials)
– Funeral Services
– Legal Fees

Tobacco:
– Cigarettes and Other Tobacco Purchases
– Nicotine Replacement Products

Ontario Government Services:
– Hunting and fishing licenses

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For investments mutual funds, hedge funds, segregated funds, exchange-traded funds (ETFs/Index Funds), professionally managed portfolios, wrap products, and charitable trusts, are now subject to the HST.
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Comprehensive official list (Ontario Ministry of Revenue):
http://www.rev.gov.on.ca/en/taxchange/taxable.html (second half of page)
http://www.rev.gov.on.ca/en/taxchange/pdf/taxable.pdf

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We can see that there is a significant amount of additional tax on things that really matter.  These are items that are part of your cost of living, and therefore the cost of living has just gone up.  The government claims that “most products we buy will see no new tax” and that there is “no new tax for 83 per cent of products and services“.  This may be true, because we are already taxed to death on pretty much everything, and now they’ve just expanded on that.

As I’ve mentioned many times before, expect more increases in taxes, fees, dues, etc. as the world pays down its government deficits from public overspending, increases to social benefits & entitlements, and taxpayer bailouts of those who were financially irresponsible (both consumers & businesses), and to compensate for the misdeeds caused by people who defrauded others.

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Related Articles:
Investment & Economic Outlook 2010

Thanks & Happy Investing! — The Investment Blogger © 2010

Author: The Investment Blogger

I’m a private investor, who developed the “function-centric investing” paradigm. I am an investor who blogs a little here and there, rather than a blogger who invests a little here and there. I'm passionate about investing and sharing investment knowledge!

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2 Comments

  1. Thanks for the post.

    I just wanted to make you aware of the person tax cuts that are part of the HST tax package.

    The HST is part of this comprehensive tax package that will see 93 per cent of Ontarians receive personal income tax cut. With these cuts Ontario now has the lowest provincial tax rate in Canada on the first $37,106 of taxable income. In fact, 90,000 low-income Ontarians will no longer have to pay Personal Income Tax.

    To help families we have introduced a permanent $260 Sales Tax Credit for low- and middle-income adults, children and seniors. In total $4.2 billion in transition payments will be delivered to help Ontarians adjust to the Harmonized Sales Tax. It is important to remember that every $100 in tax relief is equivalent to the 8% tax on $1250 in newly taxed items.

    Ontario is exempting children’s clothing and footwear, infant and child care seats, diapers, books, food under $4, newspapers, and feminine hygiene products, from the provincial portion of the HST.

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