In life, and in politics, timing is everything.
For more than a year, Ontario has been fighting a recession that economists have called the worst since The Great Depression.
The provincial economy has been battered and bruised. The economic downturn has seen thousands of jobs lost and consumer spending at near all time lows.
But, we persevered and now, finally, there are signs that recovery is just around the corner.
However, while there are positive indicators on which to build, the foundation is still weak and precarious. Continued growth can only be achieved and fueled by consumer confidence, and consumer spending. But, consumers are still jittery. They’re leery of the unpredictable swings seen in the market place.
Despite all this, the provincial government is still steamrolling ahead with its plans to bring in a Harmonized Sales Tax (HST) next July.
The HST will add an eight per cent tax to items previously not touched by the province. These include very basic and necessary things such as gasoline for your vehicle, home heating and water bills, haircuts, and new home construction.
With prices at the pumps once again hovering around the 95 cent/litre mark, the HST will push it over the dreaded $1/litre line for good.
The province has been very reluctant to discuss the consequences of bringing in the HST.
Granted, recently Premier Dalton McGuinty relented and added newspaper subscriptions and fast foods under $4 to the exemption list. But some believe the former was done to win (bribe) support or silence from journalists and newspapers while the latter was silent recognition of how unpopular the HST is among ordinary citizens.
In making the announcement, at a Tim Hortons restaurant no less, Finance Minister Dwight Duncan said exempting coffees, fast foods, and newspapers will cost the province $325 million, but “Millions of Ontarians who buy their morning coffee would benefit,” from the move. If Ontarians benefit from the exemption, then, we must not benefit from the rest of the tax.
Provincial spin doctors have told us that the HST is needed to make Ontario companies more competitive on the international markets. They promise savings gained by businesses will be passed down to consumers.
But, it is surely more than that. It represents one of the biggest tax hikes ever imposed on a province. It’s money the Liberal government needs to offset its stunning $24.7 billion deficit.
It’s a panic move when instead calm, innovative changes are what’s needed to restore economic stability and growth.
While there may be some positive results gained eventually from a harmonized tax system, adding new taxes during a sensitive economic recovery period will do more harm than good.
If the concept isn’t wrong, the timing certainly is.
– The Walkerton Herald-Times
