HST arrives in Ontario

The new harmonized sales tax has arrived in Ontario, bringing with it anger from some and plaudits from others.

The new tax took effect just after midnight Thursday. It blends the eight per cent provincial sales tax with the five per cent federal goods and services tax to create a new 13 per cent HST.

The Opposition Conservatives have attacked the McGuinty government over the introduction of the tax.

On Wednesday, Conservative Leader Tim Hudak said Ontario consumers will be hit hard.

"Canada Day is typically an expensive day at the pumps. The HST will slap another eight per cent on to the cost of fuel," he said.

The Conservatives call the HST a $3-billion tax grab.

For its part, the Ontario NDP has said that documents obtained under freedom of access legislation show the HST will add an extra $225 a year to the cost of home heating and electricity.

The new 13 per cent HST will apply to a host of products and services for which consumers used to pay just the five per cent GST not just gasoline.

Supporters of the HST, including Ontario Premier Dalton McGuinty, argue that the HST will make the province more competitive and increase investment.There are also changes being made to reduce taxes on small businesses.

Earlier this month, McGuinty released a TV commercial explaining his decision.

"[In order] to create more jobs, top economists agree the single most important thing we can do is adopt the HST," he said.

Funerals are just one of many services and goods previously exempted from provincial sales taxes that will be subjected to the HST starting on Canada Day.

Energy will carry the biggest cost for most Ontario consumers, with an immediate jump in the price of electricity, natural gas and home heating oil.

The tax on alcohol is actually decreasing, but the prices won't. The provincial tax will be lowered under the HST, but other fees and taxes will rise because of what the province says is its social responsibility to maintain minimum prices for liquor.

The HST will not apply to purchases of resale homes but will apply to new homes costing more than $400,000. New home buyers in Ontario will receive rebates up to $24,000 to lessen the impact of the HST.

'We get used to it'

Bob Aaron, a real estate lawyer in Toronto, said the HST is already adversely affecting home sales in the province.

Aaron said other costs are rising, too."Movers, cleaners, home inspection [costs] will be going up.But we're Canadians.We pay tax and we get used to it."

Ontario has exempted newspapers and prepared meals and drinks costing under $4 from the HST.

Used cars, which were previously exempt from the five per cent GST when sold privately, will now be subject to the 13 per cent HST in Ontario.

Consumers will continue to pay only the five per cent GST on children's clothing and footwear, children's car and booster seats, diapers, books and feminine hygiene products.

The HST will not be charged on basic groceries, rent, condo fees, prescription drugs, some medical devices, child care, municipal public transit, most health and education services, tutoring, most financial services and legal aid.

Even though condo fees are exempt from the HST, purchases by condominium corporations will be subject to the tax, so condo fees are expected to rise nonetheless.

The price of going to the movies or a sporting event in Ontario is actually expected to drop with the introduction of the 13 per cent HST because those outings were hit with a 10 per cent PST plus the GST.