The province’s proposed harmonized sales tax (HST) will help
“One of our most important goals is to help Ontario businesses become even more competitive, so you can produce more, export more and – most importantly – create more jobs,” Wilkinson said at the breakfast, held October 14 at the Holiday Inn Oshawa Whitby Conference Centre.
Wilkinson, the first Certified Financial Planner elected in the province, has been travelling throughout
The time to revamp the tax system is long overdue and there’s no better time than now because the economy will be “fundamentally different” after the recession – forcing
More than 130 countries have adopted the value added tax. “We’re still listening to music on an 8-track when the rest of the world has an iPod,” Wilkinson said. “We can’t attract investment and jobs in the 21st century with a tax system from the 1960s.”
In Nova Scotia, New Brunswick, and Newfoundland and Labrador, per capita investment rose by more than 11 per cent in the year following implementation of a harmonized sales tax compared to other provinces and investment in machinery and equipment increased by over 12 per cent a year, the Minister reported.
Wilkinson criticized the PST and “layers of hidden taxes” that boost the cost of an item. Companies which have been paying the PST will now get to keep the savings and if they want to remain competitive, will pass along their savings to customers, he said.
Further, the HST will be cheaper to administer than current regulations and paperwork. On that note, Wilkinson addressed concerns about the fate of provincial Ministry of Revenue employees who work in
The Liberals promise to permanently cut the small business corporate income tax rate from 5.5 to 4.5% next year, to eliminate the small business deduction surtax and capital tax, and to drop the general corporate income tax rate from 14 to 10 per cent by 2013.
But it will take time for savings to filter down to consumers. “The first year will be difficult,” Wilkinson conceded. “We don’t want a consumer-led recession because of sticker shock, so there will be a lot of fiscal stimulus in the first year.”
The federal government will transfer $4.3 billion to the McGuinty government, which will in turn give families with less than $160,000 of net income a year three tax-free payments totaling $1,000. Single people with less than $80,000 net income a year would receive three tax-free payments totaling $300.
Next year, the government will permanently reduce the personal income tax rate from 6.05 to 5.05 per cent on the first $36,848 of taxable income. The new Ontario Sales Tax Credit will provide up to $260 a year for each adult and child in low and middle-income families.
The HST will blend the 5% GST and 8% PST when it is implemented on July 1, 2010.