10 simple HST myths

Reasonable third-party groups have investigated the HST and their research debunks many of the myths. 

1) “The HST is a tax grab.”

The CD Howe Institute found the B.C. and Ontario HST’s likely revenue neutral due to the generous rebates for new homes and other sectors. The study is from last summer and recently announced relief on low value purchases under $4 in Ontario makes this even more obvious.

Reinforcing that finding, this week’s report from the Roger Martin task force on the economy says that “increased revenue from the harmonized sales tax is matched by reductions in corporate and personal taxes and by tax credits. The effect is revenue loss.”

The HST is not a tax grab. The Ontario government will actually lose revenue. That accusation is demonstrably false.

2) “The government will not hold public hearings.”

There will be public hearings on the HST held in Toronto by the appropriate legislative committee. The pre-budget tour by the Finance Committee will also offer an opportunity for those outside Toronto to opine as well.

3) The HST exists in a vacuum.

No opposition leader should be expected to point out the benefits of a government budget, but the truth is the HST reform is accompanied by an array of tax reductions for both business and individuals.

4) The HST will “increase prices.”

The Martin task force found the opposite is true: “In Atlantic Canada prices on goods fell when they harmonized the sales tax.”

5) Business will “gouge consumers.”.

Again, the Martin task force found that competition prevented that in the Atlantic Canadian experience.

6) The HST will “raise costs for small business.”

The Martin task force found “costs will decrease as small business recover sales taxes they have to pay on goods and services they purchase – just like the federal GST today. Harmonizing the provincial sales tax with the federal GST lowers administrative costs for small business.”

7) The HST “hurts seniors.”

The Martin task force found that those with lower incomes in Ontario may pay more for some services, “but they will benefit from enhancements to the property and sales tax assistance and personal tax adjustments.” Basically, the government is lowering other taxes to make up the difference for low-income seniors and others.

8) The HST is a “job killer.”

Jack Mintz found that the HST will create almost 600,000 new jobs over the next ten years.

Far from killing jobs, it is a huge boost to job creation.

9) “Now is the wrong time for the HST,” says Mr. Hudak. “Wait until the recession is over.”

The opposite is true, reports the Martin task force. “If we want to encourage business investment for job creation, now is the best time for the harmonized sales tax.”

10) The HST is the “Dalton Sales Tax.”

Considering it could not have happened without the $4.3 billion from the federal Conservatives, and is also underway in British Columbia, this is clearly a joint federal-provincial initiative.

Federal Finance Minister Jim Flaherty has been more up-front in his efforts to sell the HST lately.

Myths are compelling. That is why they get told again and again. But like the belief that the sun revolves around the earth, those who continue to perpetuate myths after they have been debunked are in danger of becoming seen as backwards -- or worse.

Disclaimer: All this information was provided by Andrew Steele of The Globe and Mail

Paramjit Dhaliwal

Paramjit Dhaliwal

CENTURY 21 Coastal Realty Ltd.
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