Nobody likes paying taxes. But some taxes are even worse than others.

Winter 2009 CSANews Issue 73  |  Posted date : Dec 12, 2009.Back to list

Taxes that force people to pay more for essentials – such as their home heating and hydro bills – are particularly painful.

Taxes that drive up the cost of living by increasing taxes on gas, realtors' fees, condo maintenance fees, moving costs, home appraisals and title insurance will only increase the challenge of the current recession.

And taxes on people's retirement savings and financial security only serve to unfairly single out and punish those who have worked so hard and deserve peace of mind in their retirement.

Yet all of these things, and more, stand to be taxed an extra 8% on July 1, 2010 should the Ontario government merge the PST and GST into a single sales tax. Some people call the new sales tax the 'HST'.

Amid the long list of goods and services that stand to go up in price due to the HST are mutual fund fees. Management fees and most operating expenses attached to mutual funds are currently subject to the GST, but not the PST. 

Under the HST, taxes on these expenses will jump from five per cent to 13 per cent. According to the Investment Funds Institute of Canada, an Ontario retiree putting $5,000 a year for 35 years into mutual funds will lose about $42,000 – or about eight years of savings – due to the compounding of incremental HST increases each year.

This is more than just a tax on mutual funds, it is also a tax on the retirement savings and financial security of seniors and retirees throughout Ontario.
In total, the Ontario government stands to take $3 billion from the pockets of its residents through this new sales tax in the first year alone.

To justify this tax grab, the Ontario government first claimed that the tax contained desirable bureaucratic cost efficiencies for certain businesses. But no bureaucratic efficiency justifies imposing $3 billion in new taxes on people already feeling the pinch of a major recession. That's $3 billion taken out of the economy at a time of record-high unemployment and stagnating job creation.

The government's next line of defence was to offer people a one-time rebate – a bribe with borrowed money – to soften the blow of their tax grab. But a one-time cheque does not come close to compensating for higher taxes on essential goods and services day-in day-out, month-in, month-out – forever.

The Ontario government even went so far as to push people into prepaying for services in advance of the sales tax taking effect next summer; with one minister telling people that they should prepay for their funerals to avoid paying higher taxes on them. Telling people that they should prepay for their funeral to avoid a sales tax increase is not only incompetent economics – it is outright insulting. It is the HST that deserves to be buried once and for all.

The fact of the matter is that nothing this government offers you in return for the HST will come close to what you will be forced to pay. This is a government which just admitted that it is running a $25 billion deficit. This is a government that wasted a billion taxpayer dollars in the eHealth scandal. They need this $3 billion in annual tax revenue to fill in the hole that they have created. Just because the government is steering our province's books on to the financial rocks does not mean that they have the right to take the retirement savings of Ontario families, as well.

A broad coalition of concerned Ontario taxpayers is forming to fight this tax grab with everything we've got. I'm proud to be part of that coalition. But we're going to need your help. Because this is not just a battle for pundits, politicians and lobbyists. It is a battle that has to be won by parents, small business owners and retirees – those who have the most at stake – and have the most to lose.
Either we all stand up today. Or we all pay up tomorrow.

Related links
Tim Hudak, MPP Website