Ontario poised to pass HST

TORONTO – Ontario’s government is on the verge of passing controversial tax legislation that will result in higher costs on about one in five items beginning July 1.

The 13 per cent harmonized sales tax (HST) is part of a larger budget bill being debated at Queen’s Park. Provincial politicians are currently debating the measure.

A vote on the bill is expected imminently.

Conservative MPP Lisa MacLeod acknowledged her party fought "an uphill battle" against the HST which roughly 75 per cent of people oppose, according to polls.

"We did everything we could to stop this $3 billion tax grab on families and the middle class," MacLeod said Tuesday morning in the legislature. "You should be ashamed of yourselves, Liberal party."

Also on Wednesday, Ontario native chiefs said they are about to launch a campaign against the HST, including road blockades and traffic disruptions and unspecified legal action.

The HST in Ontario would also eliminate the existing exemption for First Nations from paying the provincial sales tax.

The chiefs say imposing the tax without consulting natives is an attack on their sovereignty and a breach of governments’ legal duty to consult First Nations on matters that impact their rights or title.

Despite the opposition, economists are widely in favour of the move, which they believe will increase jobs and make the province more competitive.

Four other Canadian provinces have implemented their own HST. British Columbia is contemplating a similar move.

The HST will combine the current eight-per-cent Provincial Sales Tax with the five-per-cent federal GST. A range of items previously untouched by the PST – vitamins, domestic air travel and Christmas trees, for example – will be taxed. To ease the pain, the province will offer tax cuts, credits and exemptions, plus a one-time $1,000 payment for most families.

It will be up to the federal Conservatives to pass separate legislation triggering a $4.3-billion transfer to Ontario to enable the transition to the tax.

With a file from Jorge Barrera (Canwest News Service)