October 1, 2009

Ontario Road Builders’ Association backs Harmonized Sales Tax

TORONTO

With the planned harmonization of the provincial sales tax with the federal GST under attack in some quarters, a coalition of leaders from the business community has formed to demonstrate broad-based support for sales tax reform in Ontario.

The Ontario Road Builders’ Association is a member of the just-announced Smart Taxation Alliance, which includes the Ontario Chamber of Commerce, Canadian Manufacturer’s & Exporters Ontario and the Ontario Trucking Association.

The coalition endorses the planned harmonization of the two taxes as the most important measure available to stimulate economic recovery, noting that British Columbia’s Finance Minister described the move to a harmonized tax as a way to maintain competitiveness with Ontario in the attraction of jobs during a recovery.

“Harmonization will significantly reduce the tax administrative burden for contractors,” said ORBA president Tom O’Callaghan.

“It will help level the playing field by reducing the complexity of tax compliance and creating greater consistency of enforcement.

“The HST will encourage investment by reducing the after-tax cost of purchasing most types of construction equipment and many products and materials.”

The coalition says implementation of HST in Ontario will reduce business costs in the billions, and lower consumer prices.

The report also says that concern about a large overall increase in consumer prices is overblown, and that this will not have long-term effect on inflation.

The coalition said the positive impacts of a single sales tax when combined with other announced tax reforms will include:

• Cutting the marginal effective tax rate on new investment in half;

• Encouraging business investment in Ontario and the creation of jobs;

• Cutting red tape suffered by businesses in Ontario in the collection, remittance and auditing of sales taxes, for an estimated annual savings of $500 million;

• Removing layers of embedded taxes in goods and services, valued at roughly $5 billion.

• Increasing the competitiveness of Ontario business.

The blended tax is scheduled to take effect July 1.

Other members of the Smart Taxation Alliance are AGS Automotive Systems, Canadian Chamber of Commerce, Canadian Council of Chief Executives, Certified General Accountants of Ontario, Retail Council of Canada, TD Bank Financial Group and the Toronto Board of Trade.

-DCN News Services

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