HST Madness

Although it is a provincial issue, I am a bit amazed by the lack of public debate over the move to harmonize the sales tax in Ontario.

I agree, there are many positive reasons to harmonize the provincial and federal sales tax that will only benefit Ontario, but I have been surprised no one has been pointing out the obvious downside of the plan.

Does no one care there will be a SEVEN percent increase to the tax on services? Your cost of your next trip to Maui just got seven percent more expensive. (Mind you, if you're flying to Maui, I think you can afford an extra seven percent!)

A few days ago, I was chatting with a roofing contractor about getting my roof replaced. I asked him what he thought about the new HST. At first, he was shocked to learn that it passed. He didn't think the government would be stupid enough go through with such a thing. And for good reason too.

With the home renovation tax credit, his business has been booming this year. What's more, ALL his customers want to pay the 5 percent GST to keep everything above board to receive the tax credit. Revenue Canada will be shocked by the sudden boost in the returns for this year...

Next year, there will be no tax credit and there will be a whopping 13 percent tax on all home renovation projects. Everyone is going to want to pay cash, which will only grow the underground economy.

But I suspect it will grow by more than seven percent...