HARMONIZED SALES TAX (HST)
The Ontario legislator passed legislation which will harmoinze the Provincial Sales Tax (PST) which is currently 8%, with the Goods and Services Tax (GST) which is 5%, into a Harmonized Sales Tax (HST). As of July 1, 2010, the HST in Ontario will be 13%.
The HST is expected tp bring in over 3 billion dollars in extra revenue and Ontario claims that it will create new jobs and stimulate the economy. Provincial officials stated that they will offer tax credits and exemptions as well as a one-time payment of $1000.00 to help ease the additional burden on families. However, most critics agree that this tax will negatively impact middle and low-income families.
Canada Revenue Agency (CRA) reports that businesses that are currently registered for the GST will now have to collect HST and any retailers must get their point-of-sale collection in line by July 1, 2010. Ontario's Ministry of Revenue's website contains additional information and frequently asked questions about the new HST:
http://www.rev.gov.on.ca/en/taxchange/needtoknow.html
The media has reported that according to polls done in 2009, over 75% of Ontarians oppose the new HST. However, it is not just Ontarians who are opposed to the HST, as First Nations leaders all over the province were upset that neither the federal of provincial governments lived up to their fiduciary obligations with regards to the rights and interests of First Nations and breached their legal obligations to both consult with First Nations and accomodate their valid interests.
Furthermore, First Nations leaders in Ontario are concerned that their legislatively protected tax exemptions are being further eroded without concern for how it will negatively impact the poorest of the poor in this province. Not only are First Nation tax exemptions protected by federal legislation - Indian Act, 1985, but they are also protected by various treaties across the country.
Recently, the Chiefs of Ontario (COO) represent 133 First Nations in Ontario. On May 3, 2010, COO's Ontario Regional Chief Angus Toulouse signed a Memorandum of Agreement Concerning a Commitment to Continue the First Nation Point of Sale Tax Exemption Under the HST with the Government of Ontario. The Agreement can be found at the following link:
http://chiefs-of-ontario.org/Assets/MOA%20COO%20and%20ON.pdf
The purpose of this agreement is preserve the First Nations point of sale tax exemption. Ontario has also agreed to provide resources to COO in order to participate in joint discussions and for related research. Most importantly, the agreement is on a without prejudice basis to the treaty rights of First Nations in Ontario.
By way of comparison, New Brunswick, Nova Scotia, and Newfoundland all have HST and British Columbia will also implement the HST on July 1, 2010. Neither the Yukon, Northwest Territories or Nunavut have the HST. Saskatchewan, Manitoba, Alberta and Quebec also do not have HST.