TORONTO - Moving to a single, 13 per cent sales tax will kill jobs in Ontario and hit consumers hard at a time when they're already struggling, the opposition parties said Monday as the Liberal government introduced a bill to merge the eight per cent provincial sales tax with the GST.
The harmonized sales tax would take effect next July, but the legislation also includes a series of cuts to income and corporate taxes starting in January -- and up to $1,000 in rebate cheques for families to help offset the impact of the new tax in the first year.
The goal of harmonization is to help lower costs for businesses, allowing them to both lower prices for consumers and hire more staff, while the whole slate of tax changes will leave most Ontario residents better off, said Premier Dalton McGuinty.
"This is about building more jobs in the province of Ontario and it's about building a better future for all Ontarians," McGuinty told the legislature.
"Under our package of tax reforms, 93 per cent of Ontarians will get a permanent tax cut (and) the average family with an $80,000 income will see a 10 per cent cut in their personal income taxes."
The income tax cuts will not be enough to offset the impact of the HST, said Opposition Leader Tim Hudak, noting it will add eight per cent to items that until now have been exempt from Ontario's provincial sales tax.
"This is the biggest sales tax grab in the history of this province," complained Hudak.
"It will mean that Ontario working families and retirees will pay more for gas for their car, heat for their home and everyday goods and services like getting a haircut or taking their dog to the vet."
This is exactly the wrong time for the government to be imposing a tax hike in the form of a harmonized sales tax, said NDP Leader Andrea Horwath.
"People across this province are telling me this tax will kick them when they're down," said Horwath.
"It's going to hurt them financially, it's going to reduce the number of jobs that are created in this province and it's going to dampen down spending at a time when we need people to be consuming in the economy."
Horwath calls the HST a "job-killing tax," but the government points to a study that shows the package of tax changes, including harmonization and the income tax cuts, will help Ontario create almost 600,000 jobs over 10 years.
Both the Conservatives and NDP said they would be pushing the government hard to hold public hearings in cities across Ontario on the harmonization plans and warned the Liberals against trying to quickly pass the bill into law without consultations.
"If he rams it through the legislature, this is nothing less than a slippery and gutless attempt to deny a voice to the seniors, middle class families and small businesses who have the most to lose from this $3 billion tax grab," said Hudak.
The government's tax package shifts the burden onto the backs of regular families and away from the profitable corporations, said Horwath.
"We think the government needs to hear from real people," she said.
"The premier is asking Ontarians to pay more for daily essentials -- home heating, hydro, gas for the car -- and at the same time he's telling them to brace for closed emergency rooms and funding cuts."
The government said it would hold the normal public hearings in Toronto that it stages for every fall budget bill, but would not hold hearings across the province.
Finance Minister Dwight Duncan, who introduced the legislation Monday, said it contains more than $15 billion in tax cuts over three years, including $10.6 billion for individuals and $4.5 billion for businesses.
"The proposed HST and tax cuts would increase business investment, create new jobs, raise incomes and reduce prices on many consumer purchases," Duncan told the legislature.
"Now is precisely the right time to modernize the tax system so that when the effects of this global recession end, Ontario's economy is more competitive and better able to create jobs.
Many in the business community, including the Ontario Chamber of Commerce, support harmonization, but other groups including the National Citizens Coalition and the Canadian Taxpayers' Federation are vowing to fight the tax change.
Quebec, New Brunswick, Nova Scotia and Newfoundland and Labrador have already harmonized their sales taxes with the GST, and British Columbia will join Ontario in moving to a single sales tax on July 1. Manitoba has indicated it too is considering the idea.
