The new Harmonised Sales Tax, also known as the HST, will be coming to effect in Ontario July 1st 2010. This means for certain products and services we will be paying 8% more from that day.
The biggest question is how it will affect families and businesses. According to Government of Ontario 83% of the consumer purchases will not see new tax either because we are currently paying tax equivalent to HST or exempt from HST.
This list is a brief description of to what items the HST applies. It assumes the family has children, and has a disposal income of 60,000 dollars.
This is not a scientific study.
Home related costs |
Current |
Future |
|
| Mortgage | No change |
1,231.00 |
1,231.00 |
| Heating | Change |
160.00 |
172.19 |
| Hydro | Change |
65.00 |
69.95 |
| Home Insurance | No change |
45.00 |
45.00 |
| Property tax | No change |
275.00 |
275.00 |
| Water | No change |
60.00 |
60.00 |
| Internet | Change |
45.00 |
48.43 |
| Cable | No change |
50.00 |
50.00 |
| Home Phone | No change |
35.00 |
35.00 |
Travel related costs |
|||
| Auto Insurance | No change |
117.00 |
117.00 |
| Car repairs (parts and labour) | No change |
100.00 |
100.00 |
| Gasoline | Change |
150.00 |
161.43 |
| Go pass | No change |
150.00 |
150.00 |
| Taxi | Change |
60.00 |
64.57 |
Child related costs |
|||
| Diapers | No change |
100.00 |
100.00 |
| Kids clothing & shoes | No change |
60.00 |
60.00 |
| Music lessons and tutoring | No change |
60.00 |
60.00 |
| Child care | No change |
550.00 |
550.00 |
| Toys | No change |
50.00 |
50.00 |
Other |
|||
| Cell phone package | No change |
45.00 |
45.00 |
| Medication (prescription and non prescription) | No change |
50.00 |
50.00 |
| Haircut, spa service | Change |
100.00 |
107.62 |
| News paper/ movie/books/ admission sporting events | No change |
50.00 |
50.00 |
| magazenes | Change |
20.00 |
20.00 |
| Recreation (gym membership. Golf club, curling rinks etc) | Change |
150.00 |
161.43 |
| Prof fees (accounting, legal etc) | Change |
60.00 |
64.57 |
| Basic groceries | No change |
600.00 |
600.00 |
| Tobacco | Change |
100.00 |
107.62 |
| Total |
4,538.00 |
4,605.81 |
|
| Change in dollars for a month |
67.81 |
||
| Annual additional expense |
813.72 |
That is, the cost of the HST is 1.4 percent. The calculation does not include HST increase related to vacation.
For the 12 months the Ontario government will pay $1,000.00 to families (provided family income is less than $ 160 K for 2009). The payment will be made in 3 installments but going forward families and individuals are going to pay these additional amount
Obviously, there is no consensus on the real cost of the HST for Ontarians. The Centre for Policy Alternatives, which is a left-of-centre think tank, for example, says when tax-credits and income tax cuts provided in the provincial budget are included, the real cost is about $ 37.00. But the group does say that low income families might be hit harder as they might not benefit from certain tax credits.
On the other hand, another recent report claims costs would be much higher, going into hundreds of dollars a year just in utilies costs alone.
You can get more information from the Government of Ontario’s website on the HST.
