Saturday, October 23, 2010

Please do NOT remove HST from heating fuel

As someone who disagrees with the HST I have been receiving notices from the Ontario NDP and the federal NDP about their disagreements with the HST. As is often the case, just because someone disagrees with something doesn't mean they disagree for a compatible reason.

Why I disagree with the HST

I consider the HST to be a tax shift from products onto services. Services were previously taxed with the GST, but not PST, and thus services only had the 5% GST applied. Now in Ontario services have to charge 13% (an increase of the 8% from Ontario).

This will mean that products will seem comparatively less expensive than services in those scenarios where one is competing with each other, such as repair/reuse compared to replacement of damaged goods. This will have a net negative impact on our environment.

This is in my mind the opposite of a Green Tax Shift type of initiative which would tend to be removing taxes from services and placing them onto products.

If the HST were to be removed entirely from services, then this would have the desired effect.

Why I disagree with the NDP

The NDP want to do the opposite, which is remove the HST from heating fuel. Not only do I believe that HST should remain on heating fuel, I am a strong believer in there being a carbon tax applied in a government revenue-neutral way. The policy should be for the price of heating fuel to go up, and the costs of labour to go down (No HST on services, lower income taxes for individuals, etc).

In other words, the policy that I think would be good for Canada and Canadians, and the tax policy promoted by the NDP, are the opposite. Disagreeing with the HST doesn't tell you anything.
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