VANCOUVER — After weeks of hot political debate, public protest and industry lobbying, a crack appeared in the provincial government's implementation of the hugely unpopular harmonized sales tax Thursday with a change to how it will apply to new housing.
“We heard the concerns from consumers and industry,” Finance Minister Colin Hansen said in announcing that government will raise the threshold for its HST rebate on new homes to $525,000 from $400,000, effectively increasing the payback by 30 per cent.
The maximum HST rebate on new homes will now be $26,250, up from $20,000.
Government also grandfathered implementation of the tax on new housing. If buyers signed purchase contracts for new homes, but do not take possession before the HST’s July 1, 2010 implementation, HST will not apply to their purchases.
The province still has to push enabling legislation for the HST through the legislature in the face of an NDP opposition calling for harmonization to be scrapped and the background of a public highly dissatisfied with the tax.
Hansen announced the HST change for housing two days after the Manitoba government said it would not touch sales-tax harmonization, which it estimated would load $400 million a year in additional costs onto consumers, because it would “be the wrong signal to send” during an economic downturn.
And in Toronto, a raucous opposition protest Thursday morning over that province’s HST enabling legislation resulted in three Conservative MPP’s being ejected from the provincial parliament for pillorying Premier Dalton McGuinty and Finance Minister Dwight Duncan by using unparliamentary language.
“I don’t like getting ejected,” Peter Shurman, one of the rebellious MPPs said. “Nobody wants to be thrown out of the House, but if that’s the only way you can get attention when you know that your constituents are demanding public hearings, then that’s what you do.”
With files from Canwest News Service