TORONTO - Most Ontario consumers will see a net benefit from the harmonized sales tax in 2013 because of new tax credits and energy rebates, according to Ministry of Finance documents.
The documents, obtained by The Canadian Press, suggest the 13 per cent HST would not cost Ontario households $385 million more by 2013 as originally projected last June.
Instead, the revised figures from the Ministry of Finance state the single sales tax will result in $490 million in savings for consumers in the third year.
That's good news for a Liberal government trying for a third term this October, which has been under increasing fire over the unpopular tax.
The documents say about 68 per cent of taxpayers -- people earning up to $90,000 a year -- will see a net savings in 2013. That's up from about 49 per cent of taxpayers who would have been better off under the HST in its third year before the tax credits were enhanced.
However, 32 per cent of Ontarians, those earning more than $90,000, will be paying more in taxes by 2013.
Speaking in Ottawa on Thursday, Premier Dalton McGuinty admitted there was strong opposition to the HST, but said the tax would make Ontario businesses more competitive and help create more jobs.
"It's only natural for people to say: 'Do we have to adopt the HST now?' The answer is yes we do," McGuinty said after a speech defending the Liberal government's economic policies.
"We've laid the foundation for stronger growth in the Ontario economy."
The latest figures take into account a series of tax credits introduced or enhanced by the Liberals to offset the HST, and 10 per cent electricity bill rebates introduced Jan. 1, which will last until 2016.
The Opposition said the Liberals were forced to give consumers a break to help their re-election chances in October.
"The simple fact that they've had to introduce these rebates shows that Ontario families are suffering as a result of this $3-billion tax hike," said Progressive Conservative revenue critic Lisa MacLeod.
The documents show the government expects businesses will pass along 90 per cent of their savings -- about $1.9 billion -- in the form of lower prices by 2013.
The New Democrats questioned the government's calculations.
"The government's projections are far fetched at best," said NDP Leader Andrea Horwath.
"There's just no way that $2 billion is going to be passed on to people. I don't believe that for a minute, and I don't think anybody else does."
The Tories agreed with the NDP's assessment of the government's numbers on the HST.
"It's wishful thinking, but no one believes them," said MacLeod.
"These new calculations really don't say much to anybody because they're not trusted."
When the 13 per cent HST was introduced last July, it hit 17 per cent of goods and services previously exempt from the eight per cent Ontario sales tax, including gasoline, electricity and home heating.
Critics assailed the move to a single sales tax as shifting the tax burden off businesses and onto the backs of consumers.
"It is a shift in tax burden, and it's one that people are very unhappy about," said Horwath.
"No matter where I go, people are telling me the HST is something they absolutely hate."
The government said last June that the HST would mean a net benefit for consumers of $1.3 billion in the first year, which included government payments totalling $300 to $1,000 to offset the impact of the new tax.
The last phase of those HST payments will go out to families earning under $160,000 a year next June, just four months before voters go to the polls.
The single sales tax was introduced to make businesses more competitive by removing the PST from input costs, which McGuinty said Wednesday would be passed on in the form of lower prices.
"They're passed on because it's a highly competitive economy," he said. "That's just how it works."
