On Wednesday December 9th, 2010, the House of Commons passed legislation to enable the provinces to harmonize their sale taxes.This new tax will be called the “HST”, short for harmonized sales tax.In the House of Commons, the HST bill was passed by a vote of 253-37, where only the NDP opposed the legislation.Ontario and BC plan to put this new tax in effect on July 1, 2010.Many consumers are not in favor with the HST mainly because they have to pay more tax on items such as gasoline and appliances bills.Businesses on the other hand will profit because they will no longer have to pay tax on inputs such as materials and supplies.
CONNECTION
Chapter 3 was about the role of government in an economy.In chapter 3 we learned about economic stabilization.It states that when economic conditions were poor governments used to intervene and increased their spending on goods and services, and taxes would decrease to encourage people to spend disposable income.When the economy was booming, the government would increase tax rates to decrease the level of government spending and to reduce government dept.Currently the Canadian Government approved of the HST, but not everyone agrees that our economy is flourishing at the moment.We are still recovering from and economic recession but the government feels that new tax laws should be introduced.
Chapter 4 covered more about the government in Canada.It talked about the concept of GDP; the value of all goods and services that a country produces in a year.Since the HST is suppose to reduce the cost exports in Ontario and other business operations, we should be seeing a gradual increase in our GDP in the years to come.
REFLECTION
With the introduction of the HST, many consumers are aggravated.Previous products and services that were PST exempt will now have HST applied to them.Even going out to a restaurant for dinner will cost more than before.If the government is introducing the HST in hopes of improving the profits of businesses and ultimately improving our economy, then why are they delaying until July 1st to put the tax in effect?With the Olympics just around the corner, it would be more logical to introduce the HST early in the year so we can benefit from this event.Also by introducing the HST in the summer, Canadians will already have spent a large amount of money during the Olympics and will be paying off credit card bills.The economy is finally starting to recover and the government suddenly decides to bombard us with a new tax, great move.
