Corpcentre's Blog

December 15, 2009

Ontario Justifies HST

The votes are in. Ontario’s Liberal government passed legislation to create a single 13 per cent Harmonized Sales Tax (HST) beginning July 1, 2010. The final vote came after weeks of staunch opposition in the Ontario legislature. However, as NDP leader Andrea Horwath stated, the Liberal majority was able to “ram through the HST bill…with little debate as possible.”
 
The Liberals are enthusiastic about the HST. In a province still reeling from massive unemployment due to the current recession, the government estimates that the new tax will help create 600,000 new jobs over the next decade. Blending the PST and the GST will lower costs for businesses. This, in turn, will allow businesses to lower prices for consumers and hire more staff.
 
The opposition parties are adamant that the public, if asked, would strongly oppose the new HST and, thus, the Liberals did not take the tax issue to the polls. The opposition feels that the tax bill was railroaded as a way to increase tax revenues for the province. While many businesses will, indeed, benefit from the new tax, consumers will ultimately pay more from their pockets. Current PST exempt items including gasoline, home heating fuel, and cable TV will now be taxed under the new HST.
 
The new tax legislation is not without compensation. January 1, 2010 will see the implementation of tax cuts to both corporate and income taxes. Furthermore, some families will be entitled to a one-time rebate of up to $1,000 to offset the tax impact.
 
Ontario is not the only province to implement the HST. New Brunswick, Quebec, Nova Scotia, Newfoundland and Labrador have already done so. British Columbia has passed legislation to implement the HST next year as well.

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October 13, 2009

Federal Government: $20 Million to Develop Eastern Ontario

Filed under: economic recovery,incorporate in Ontario,Ontario Business — corpcentre @ 8:39 pm

The Canadian government’s Economic Action Plan was designed and legislated earlier this year to provide economic stimulus and fiscal assistance to segments of the country in need as a result of the recent global recession. One such area that has received special government attention is the rural region of eastern Ontario.
Over the next two years, $20 million of stimulus funds will be provided by the Federal government for the Eastern Ontario Development Program (EODP). EODP will be administered by a new government agency, the Southern Ontario Development Agency, currently being established. EODP is designed to contribute to the successful development of business and job opportunities by supporting community-based initiatives in rural communities. These funded opportunities will hopefully attract and retain youth in the communities, support skills development, make capital available to new and existing businesses, and support technological enhancements in these communities located far from the major urban centres of the province.
The rural area of Eastern Ontario extends east from Durham Region and Algonquin Park and is bounded by the border of Quebec. Not included in this program are the cities of Kingston and Ottawa.
In order to make these funds available to a broad range of residents, EODP eligibility is open to non-profit organizations (including municipalities), Aboriginal organizations, community development associations and organizations, local entrepreneurs, and small to medium sized businesses within the administered region.
Organizations requiring detailed information on eligibility and applications should contact a local Industry Canada officer. Officer information can be obtained from the Industry Canada web site. 
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August 11, 2009

Harmony in Ontario Tax System?

Filed under: incorporate in Ontario,Ontario Busines,Ontario Companies — corpcentre @ 5:53 pm

The HST – Harmonized Sales Tax – will become a way of life in Ontario. The new 13 percent tax, slated to begin July 2010, will harmonize the federal and provincial sales taxes. Provincial legislators claim that the HST is good for the province. It will ultimately save businesses money and these savings can be passed on to the consumer. Not everyone, though, is as optimistic as the province’s leaders.

Some analysts and tax specialists predict that the HST will create an underground economy. It will negatively affect many small and medium-sized firms that provide services and were previously exempt from the provincial sales tax. This will force these businesses offshore or to other provincial jurisdictions that don’t charge PST on services. Ontario will lose the competitive advantage that it had.

Not all analysts agree with this doomsday outlook, though. Citing the Atlantic Provinces that harmonized their sales taxes in 1997, no great revolution took place. There was no tremendous increase in business outsourcing their work, nor did businesses leave home to seek better tax systems across the nation.

Ontario legislators predict that, due to the HST, companies will save $500-million in tax compliance. The new tax will also improve cost efficiencies in government. The province does acknowledge that business will have to change their accounting and point-of-sale systems to accommodate the new tax. However, the province has set up a one-time $400-million fund that will provide tax credits to small businesses to offset the costs of these changes.

One final skeptical note that opponents point out. Previously, companies were compensated for collecting retail sales taxes. Under the new HST, businesses will provide the collection services for the province free of charge.

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