TORONTO - Ontarians expecting some immediate price hikes on Canada Day when the new harmonized sales tax comes into effect scrambled to make their last-minute purchases Wednesday hoping to save on the cost of gasoline at the pumps.
With only half a tank of gas, Toronto film technician Dean Ford made sure to fill up before the HST set in Thursday and adds another eight per cent to the cost of a fillup.
At an Esso gas station near the heart of downtown Toronto, Ford said he's looking to cut costs anywhere he can since his young family already has a hard enough time making ends meet.
"We have a brand new baby. We can't afford anything anyway," he said. "It's ridiculous. Everything's costing way too much now."
The new HST combines the five per cent Goods and Services Tax with the eight per cent provincial Retail Sales Tax into a 13 per cent harmonized sales tax, and gives businesses a break from the provincial tax they pay on all supplies and inputs.
B.C. will also impose its own 12 per cent HST on Thursday, but will not add any more taxes to gasoline or other fuels since the province already charges a carbon tax on fuels, a levy Ontario does not have.
For consumers, the new blended tax in Ontario will be applied to about 17 per cent of purchases previously exempt from the provincial sales tax. Critics of the proposal say it's a tax grab by the Liberal government in Canada's most populous province.
The biggest impact for most consumers will be on energy costs, with electricity, gasoline and diesel fuel -- along with home heating oil and natural gas -- all subjected to an extra eight per cent in sales taxes.
Nancy Lo, a Toronto resident who runs her own delivery service, and spends most of the day in her van, spends at least $20 a day on gas and was resigned Wednesday to the looming pump prices increase.
A fillup on an empty 75-litre gas tank on Thursday could cost $6 or $7 more, depending on the local pump price, because of the HST.
"Well, if they want the money what can you do?" she said.
Mike Fornan, filling up his brown sedan, felt the tax is a good thing because it helps pay for the province's education and health care costs.
"Taxes are a part of life," said the semi-retired Toronto resident. "We live in a great country and we have great education and great health care -- and we have to pay for it."
Aside from gasoline and other energy, the other area to be hit with big increases because of the HST will be services, with everything from getting a hair cut and going to the dry cleaner to lawyer's fees and funerals now subject to extra taxes.
The Liberal government wants to switch the tax burden off of businesses and onto consumers, with the goal of making companies more competitive so they can create jobs and pass along savings in the form of lower prices, said Premier Dalton McGuinty.
"I think Ontarians need to understand why we are asking more of them -- and I recognize we are doing that when we go ahead with the HST -- because we need to build a stronger economy," he said.
"We've got to make sure our businesses are more competitive in a global economy and fundamentally that's what this is all about: more jobs today and more jobs tomorrow."
However, the opposition parties call the HST a "greedy tax grab," and warn it will hurt consumers at a time when they can least afford it.
"I am picking up this simmering anger among ordinary hard-working Ontario families," said Progressive Conservative Leader Tim Hudak.
"They're getting nailed with the HST on Canada Day (and) I'm hearing more and more from people that enough is enough, they can't take any more of this."
The New Democrats said there is "no doubt that people are going to suffer" financially as a result of the HST financially.
"The government has torqued the numbers significantly to say 90 per cent of all savings from the HST for companies are going to be passed on to consumers," said NDP Leader Andrea Horwath.
"That is absolutely not going to happen. The LCBO is not even going to do that, so why would private sector businesses do that?"
Even though the tax on alcohol is actually decreasing because of the HST, with provincial taxes of 10-to-12 per cent dropping to eight per cent, prices will not fall.
Other fees and taxes will rise because of what the Ontario government says is its social responsibility to maintain minimum prices for liquor.
The HST will not apply to purchases of resale homes, but will apply to new homes costing over $400,000. However, new home buyers will receive HST rebates of up to $24,000.
Internet services and green fees will now be subject to the HST in Ontario.
The province has also exempted newspapers and prepared meals and drinks costing under $4 from the HST.
One bit of good news from the HST: the price of going to the movies or a sporting event is actually expected to drop because they had been subject to a 10 per cent PST plus the GST.
After months of political ping-pong between the federal and provincial governments, the two agreed to give Ontario First Nations the same point-of-sale exemption for the HST that they'd enjoyed for decades with the provincial sales tax.
However, the two governments waited so long to reach a deal the exemption won't actually start until September, two months after the HST takes effect.
With files from Dan Robson
