The Greater Oshawa Chamber of Commerce in co-operation with the Durham Region Association of Realtors and Durham Region Homebuilders hosted a breakfast meeting on October 14th to learn first hand from Ontario’s Revenue Minister John Wilkinson why the Harmonized Sales Tax (HST) is good for business, consumers and the broader Ontario economy.
Click here to read the Minister’s Speech
Business has long advocated for reform, that will substantially lower the cost of doing business and put the province on a path towards increased competitiveness and productivity and generate more high-value added jobs.
“The Greater Oshawa Chamber of Commerce is pleased to partner with the Homebuilders and Realtors to bring the Minister to Durham Region”, stated Bob Malcolmson, CEO of the Chamber, adding “it’s important to understand why the government has committed to this policy and what it means to business and industry”.
Recently in Toronto a non-partisan coalition of leaders from the business community formed the Smart Taxation Alliance to demonstrate the broad-based support for sales tax reform in Ontario. The coalition includes the Ontario Chamber of Commerce, AGS Automotive Systems, Canadian Chamber of Commerce, Canadian Council of Chief Executives, Canadian Manufacturer’s & Exporters Ontario, Certified General Accountants of Ontario, Ontario Road Builders’ Association, Ontario Trucking Association, Retail Council of Canada, TD Bank Financial Group, and the Toronto Board of Trade.
The coalition endorses the planned harmonization of the provincial sales tax with the federal GST as the most important measure available to stimulate economic recovery, noting that British Columbia’s Finance Minister described the move to a harmonized tax as a way not to lose competitiveness with Ontario in the attraction of jobs during the critical time of economic recovery.
The Certified Accountants of Ontario feel two different sales taxes with different tax bases and reporting periods are cumbersome and an administrative burden on Ontario businesses and that a harmonized sales tax will ease that burden and reduce costs for business, thereby making Ontario’s economy more competitive.
Thomas d’Aquino, Chief Executive and President, Canadian Council of Chief Executives, states “any tax reform initiative must be managed carefully, but the bottom line is that sales tax harmonization will strengthen Ontario’s competitiveness, attract new investment and improve job opportunities for workers throughout the province.”
A report published by TD Economics notes that the implementation of HST in Ontario will reduce business costs in the billions, which in turn, will be passed on to consumers in the form of lower prices. It also points out that concerns of a large overall increase in consumer prices is overblown, and that it will not have an enduring effect on the inflation rate. Ultimately the report concludes the tax reform will serve the long term interests for Ontario.
“The tax rate on business investment in Ontario has put us at a disadvantage next to our peer jurisdictions in the US and Canada”, stated Len Crispino, President & CEO of the Ontario Chamber of Commerce, “and it must urgently be addressed if we are expected to be a magnet for investment and innovation in this province, we must move ahead with the tax reforms, most importantly, sales tax harmonization,” Crispino added.
Positive impacts of a single sales tax, when combined with other announced tax reforms will include: cutting the marginal effective tax rate on new investment in half; encouraging business investment in Ontario and the creation of jobs; cutting in half the red tape suffered by businesses in Ontario in the collection, remittance and auditing of sales taxes, for an estimated annual savings of $500 million; removing layers of embedded taxes in goods and services throughout Ontario valued at roughly $5 billion; leveling the playing field with all goods and services in the economy so that all sectors contribute equally to revenue generation in the province; and, increasing competitiveness of Ontario business.
The Smart Taxation Alliance will continue to promote the positive benefits of sales tax harmonization and help to dispel some of the myths and misunderstandings surrounding tax reform.