Friday, March 27, 2009

declare the pennies on your eyes

The provincial Ontario government just released the provincial budget for the coming fiscal year. The main change is the inroduction of a harmonized gas tax. Previously we'd been paying two separate taxes - an 8% provincial tax, and a 5% federal tax. Now, they're lumping them together and we'll be paying a 13% harmonized tax.

Image above is from Marc Engblom's Comic Coverage blog. The post covers an issue of Superman where the Taxman tries to get Supes to pay billions of dollars in backtaxes.

So the harmonized tax sounds simple - but there is a catch (which I like). The provincial tax was primarily on goods not services, and so many things were exempt from the 8% PST. Now they won't be. Apparently this includes gasoline, which I don't really understand, because my understanding was that the provincial government collected tax on gas, and then gave a cut of it to municipalities in order to supplement public transit funding.

In the Globe and Mail, New Democrat Leader Andrea Horwath states that the new harmonized tax that would boost daily costs for consumers.

"Make no mistake, behind the veil of so-called rebates and credits, families will be paying more. They're going to be paying more for home essentials, like home heating and gas for the car, not to mention that morning coffee and doughnut," she said.

Buyers don't pay PST on gasoline now. Ms. Horwath estimated the new harmonized tax on gas would cost families $150 per year per vehicle.

I've written before that I find gasoline taxes & prices in N. America to be ridiculously low.

With gas so cheap here, no one has any incentive to change their driving habits, and the car companies have had little reason to produce really fuel-efficient cars (which is obviously changing these days). Anyway - thank God gas is going to be costing more. I think that is long overdue, and I just hope that the province gives a hefty chunk of the gas tax revenue to munipalities to allow them to actually run a public transit service which is so good that your neighbour with three vehicles actually decides to ride transit once in a while.

1 comment:

geoffrey said...

Jack (Layton) lost my vote in the last election crying about gas prices. Its a shame Andrea is on the same track.