Daily Archives: December 16, 2009

Manitoba Holds Out against the HST

Posted in: "All, Business Development by Admin | No Comments Wednesday, December 16, 2009

According to the Winnipeg Free Press, the government of Manitoba is in no hurry to jump onto the Harmonized Sales Tax (HST) bandwagon.

Premier Selinger made it clear that his government will not be joining provinces such as Ontario and B.C. in adopting the HST any time soon. In a news release on December 15, 2009, the Manitoba government stated its reasons against adopting the HST. The main concern was for the excessive tax burden on the consumer – an additional $400 million a year.

In fact, after considering the tax savings from the business sector, it’s estimated that the proposed harmonization may in fact cost the province about $134 million in lost revenue every year. Small wonder about the government’s position.

Manitoba is now one of the four provinces in Canada that hasn’t brought in an HST, including PEI and Saskatchewan. Alberta has no provincial sales tax and so isn’t a candidate for HST.

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PSWLaw HST Bulletin: Dodge the Bullet and Save 8%

Posted in: "All, Business Development by Admin | No Comments Wednesday, December 16, 2009

Since my posting on the HST (“HST to Become Reality for Ontarians,” December 10, 2009), I have received several inquiries regarding the upcoming HST. In response I’ve decided that I’ll post bulletins on new HST developments.

Ontario’s HST, or Harmonized Sales Tax, will blend the Goods and Services Tax (GST) and the Provincial Retail Sales Tax (PST) into one 13% tax at the conclusion of most sales of goods and services. Many goods and services that are currently not PST-taxable will become HST-taxable. As a result, consumers may be facing a little buyer’s remorse at checkout counters after the HST comes into effect.

One way of dodging the HST tax jump is to purchase in bulk goods and services not PST-taxable prior to the launch day for the new tax in Ontario, currently scheduled for July 1, 2010. As you may have guessed, such items are few and far in between. I’ve identified several of them below:

  • Pre-paid funerals
  • Pre-paid advertising
  • Stamps
  • Books
  • Magazine subscriptions

Items that are exempted from the GST, such as produce and most other groceries, remain exempted from the HST.

Unfortunately, the GST/HST will be applied to professional services, such as accounting and legal services, when the accounts are rendered.

For example, a lawyer’s invoice issued the day before the HST commencement day will bear the 5% GST, while an invoice issued on or after that day will include the 13% HST.

Perhaps it’s a good time to resolve your accounting or legal issues and have the accounts rendered before the HST comes into effect.

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