Food under $4 to be HST-free, Ontario says
Certain-priced fast food, beverages escape tax's provincial part
Last Updated: Thursday, November 12, 2009 | 12:38 PM ET
CBC News
Fast food, coffee and newspapers are some of the items the Ontario government says will be exempt from a controversial blended sales tax the province will implement next year.
Reports say Ontario Finance Minister Dwight Duncan, shown at Queen's Park, will unveil a host of exemptions to the province's harmonized sales tax system on Thursday. (Canadian Press) "It's important for Ontarians to know that today's announcement is about far more than not raising coffee prices," Ontario Finance Minister Dwight Duncan said in front of the backdrop of a Tim Hortons franchise in Toronto's west end.
"It's part of a much larger, comprehensive tax package that will create jobs."
The exemptions announced Thursday on food or beverages heated for consumption, salads, sandwiches; platters of cheese, cold cuts, fruit and vegetables will cost the province $325 million in revenue, Duncan said, but the plan will more than pay for itself in jobs created and by expanding the tax base overall.
The McGuinty government has already secured that books, children's clothing and footwear, diapers, car and booster seats, and feminine hygiene products will be exempt from the eight per cent provincial component of the tax.
Other items, such as basic groceries, most health and education services, prescription drugs and childcare would not be subject to the HST, the province says.
Over three years, the province claims the HST plan will provide $10.6 billion in direct payments and permanent tax relief for residents of Ontario, and 93 per cent of Ontarians can expect a personal income tax cut as a result.
Opposition alleges tax grab
The 13 per cent HST kicks in on July 1, the same day British Columbia plans to bring in a 12 per cent harmonized tax.
Duncan touted a recent report from tax expert Jack Mintz, who said harmonizing the sales taxes combined with corporate and income tax cuts will help create an estimated 591,000 new jobs in the province over 10 years.
Opposition parties have labelled tax harmonization a massive tax grab.
They say merging the Ontario sales tax with the five per cent federal GST will hike the cost of many items currently exempt from the provincial levy.
The merged tax will still apply to items like gasoline and home heating fuel, the opposition notes.
With files from The Canadian Press
