Ever since I can remember I've heard the comment that there is "no difference" between Canadians and Americans. I respectfully beg to differ as there is a difference on so many levels! We have unique Canadian culture consisting of Canadianisms, a Canadian perspective on world events, Canadian cuisine as well as products and foods only available in Canada. This blog is dedicated to celebrating all things Canadian from "my perspective" as a Canadian. Please enjoy your visit and be sure to visit often.

Garden Gnome
Americans should never underestimate the constant pressure on Canada which the mere presence of the United States has produced. We're different people from you and we're different people because of you. Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is effected by every twitch and grunt. It should not therefore be expected that this kind of nation, this Canada, should project itself as a mirror image of the United States.
- Pierre Trudeau

Monday, June 14, 2010

The High Price of Increased Taxation in Canada

Despite Stephen Harper's campaign promises to not introduce any new taxes he has done so in the form of user fees for health care, television tax and HST in British Columbia and Ontario.  What effect are these new taxes having on Canadians?  From this Canadian's Perspective we are now seeing the following happening in Canada as a direct result of new taxation:

  • CPIF aka tv tax - This tax currently adds 1.5% of your programming charges to your bill.  At $1.45 per month the overall cost per year is  $17.40.  Canadians are waking up to the fact that they can do without actual television.  In fact a recent report found more Canadians are watching their favourite television shows online rather than through convention television signals.  With the onset of the CPIF some of our friends have resorted to discontinuing their cable television service while others have invested in addition equipment to use existing antennas.  So in the long run  the cable and satellite television providers are losing customers.  Whether this matters to them or not remains to be seen.
  • Harmonized Sales Tax (HST) - The HST basically is combining the Provincial Sales Tax (PST) and Goods and Services Tax (GST).  In Ontario this means 17% of goods and services including home heating fuel, gasoline and electricity will now see an additional 8% tax due to the HST.  Conservative estimates is this will cost each person in Ontario an additional $500 per year however some are saying it will be more like $1,000 per year.  This tax is going to hurt our working poor, those on fixed incomes and the working class the most.  What the HST is doing particularly in Ontario is strengthening the underground economy.  More people are willing to pay cash to avoid paying the tax even for larger repairs such as roofing.  People are more willing to barter, pay cash under the table, buy at yard and estate sales and in short do whatever it takes to avoid paying the HST.  Websites have popped up even advising that those in Ontario and British Columbia should secure employment where they can work for cash and not report the income.  Those living in border towns (ON/NY, ON/MI, ON/MN), (ON/MB or ON/QC) can avoid the some of the HST by shopping and buying gas outside of Ontario.  In hindsight I am sure at some point Stephen Harper and Dalton McGuinty is going to realize the HST was not a good idea and definitely the timing was extremely poorly planned.  Notice what is happening though?  Canadians are more willing to shop outside of Canada and in some cases are being encouraged to do so by bording US states.  Apparently Harper and McGuinty have not heard of snowbirds who can legally bring back a certain amount of goods duty free after being outside of the country for extended periods and that includes being tax free as well.  They also apparently haven't heard of Canadian tourists vacationing outside of Canada and even the ever present cross-border shopping.  Essentially with this tax Harper and McGuinty are driving consumers away from purchasing in Canada.
  • more protests - Surprisingly Canadians as a whole do not protest loudly against taxation.  Residents of British Columbia are actually protesting louder spurred on by Washington State offering tax free shopping for Canadians than Ontario residents that will feel the pinch of the HST more.  HST will be added to home heating fuel, electricity and gasoline in Ontario increasing the costs by 8% whereas it will not be added to these goods and services in British Columbia.  Even though the HST protests are going for the most part unnoticed things are getting a bit more heated as the July 1 implementation deadline draws near with people starting to realize what a tax grab the HST is.
  • food insecurity -  The sad reality is just in the HST alone food insecurity is going to increase in both British Columbia and Ontario.  That extra 8% tax on items that previously were not taxed is going to have an impact.  At an HST cost of $500 per person it works out to an extra $41.67 per person per month just in HST taxation.  That might not sound like a lot of money but for those on fixed incomes (pensions, social assistance) that is $41.67 per month that they don't have to spend on essential living costs like food and utilities.  If the predicted $1,000 per person amount comes to be as it promises to, then the average person somehow has to find and additional $83.33 per month just to cover the cost.  That is almost enough to feed a frugal family for one week!  Suddenly a  family that was just barely able to keep food on their table is a week short.  What happens?  The simple answer is more and more families in Canada go hungry and in most cases these are families consisting of single parents with children.
  • widens the distance between the rich and poor - Those who can afford the extra 8% HST or the extra 1.5% tv tax or the extra user fees are not going to be effected as much as the very poor in Canada.  What all these extra taxes do is move some from the poor to the very poor no longer being able to afford the basic necessities of life.  They in turn have to start relying on the social safety net (social assistance, food bank, etc) stressing those systems.  Meanwhile those who put the new taxes into place have no problem sitting down to enjoy a $1,000 meal courtesty of the taxpayers!  The problem is Stephen Harper and Dalton McGuinty will never feel the pinch of extra taxation and they are so far removed from the working class and poor that they will never understand the impact their policies are making on the lives of others!


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