Mr. McGuilty: how do you sleep at night?

GST is currently charged on the mutual fund fees.

If the fund earns 9% before the 2% MER (including GST) is charged, then it has a net return of 7%.

If the HST replaces the GST, the MER increases by the amount of PST included in the HST or 8%.

The new MER increases from 2% to 2.15% (2 / 1.05 x 1.13).

wouldnt it effectively only add 10%?

not that thats good it sux … just want to get the numbers right

For most taxpayers on Ontario and B.C., the HST should be a non-event because the rate of sales tax you pay would not be different.

For businesses, the implementation of HST involves cost to update software and cash registers as well as understand and train staff to manage the new program. However, these are one-time costs.

The real benefit is that the provincial government will no longer manage the program shift that work to the federal government. Provincially there are significant cost savings as they no longer manage the program.

The biggest issue in Ontario was the fact that some items that were previously non-taxable would now be taxable under the HST regime. In addition, there was the issue of certain financial services fees charged by financial institutions that may affect all Canadians. It appears this is the same issue in B.C.

From my perspective, the move to HST is very positive, although Ontario and B.C. provincial governments must ensure they are clear their intent is to add more services to the tax base or make provisions to ensure previously PST free items remain that way.