Ontarians brace for HST bump on power costs

Ontario HST combines GST and PST into a 13% harmonized sales tax, raising rates on services and energy, adding rebates and exemptions, affecting new homes, and promising business savings, consumer impacts, and job creation.

Ontarians should brace for immediate price hikes on electricity, gasoline, diesel, home heating oil and natural gas starting Canada Day.

The province's move to a harmonized sales tax will mean increases for about 17 per cent of purchases previously exempt from the provincial sales tax, prompting the NDP to urge an HST cut on power bills in response.

The change combines the five per cent Goods and Services Tax with the eight per cent Retail Sales Tax into a 13 per cent HST.

In addition to energy, where some households could see an extra $225 on power bills, many services will also face higher taxes including funerals, Internet fees, hair cuts and dry cleaning.

Premier Dalton McGuinty says he's confident businesses will pass along HST savings in the form of lower prices, including a break on power bills for Ontarians, and also be able to create 600,000 jobs over the next decade.

But the opposition parties call the HST a "greedy tax grab," with Tim Hudak vowing to reduce HST on power bills as they warn it will hurt consumers when they can least afford it.

The HST will not apply to resale homes, but will apply to new homes costing over 400-thousand dollars, although there are rebates of up to 24-thousand dollars.

Going to the movies or a sporting event could actually drop in price because they had been subject to a 10 per cent PST plus the GST.

Ontario has exempted newspapers and prepared meals and drinks costing under four dollars from the HST, and there is tax relief for seniors on power bills through targeted credits.

And Ontario First Nations will get the same point-of-sale exemption for the HST that they've had for decades with the provincial sales tax, but it won't kick in until September 1.

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