On June 3rd, the Ontario Ministry of Revenue released an information notice about the proposed single sales tax or HST (Harmonized Sales Tax).
The information notices outlines the government’s assessment of the impact the new HST would have on Ontario’s economy. Operating on the same tax base at the federal GST and with essentially the same rules, the Ontario government argues that the current retail sales tax can become embedded in the price of finished goods. By harmonizing with the GST, this embedding of the RST would be eliminated and overall prices on some goods would fall.
Some items that are currently subject GST will be zero-rated for the purposes of the Ontario HST. As announced earlier this year , this list will include:
- children’s clothing and footwear
- children’s car seats and booster seats,
- diapers, and
- feminine hygiene products
Despite the concerns in the media about the impact the new HST would have on investors throughout the country, no relief appears to be in order for financial services, and in particular mutual funds.
You can read some of the other press on this issue by following the attached links:
- Canadian Business – Ontario budget: HST could hinder investors
- Canadian Business – HST and stimulus spending focus of Ontario budget
- National Post/Wealthy Boomer – McGuinty’s Wealth Tax affects all Canadians, not just Ontario