HST Boosts Economy
Creating Jobs For Ontario Families
McGuinty Government’s Open Ontario Plan Helps Families Get Ahead
The Harmonized Sales Tax is now in effect – and that means a stronger economy with more competitive businesses that create more jobs for hard-working Ontario families.
In more than 140 countries and four other provinces, a value-added sales tax like the HST is already a fact of life. To remain competitive and create new jobs, this change in our antiquated 50 year old tax system is not only necessary but the right thing to do. As a result of the HST and other business tax cuts, the tax rate on business investments has been cut in half making Ontario one of the most competitive jurisdictions in the world. A study by tax expert Jack Mintz estimated that Ontario’s tax plan will help deliver increased annual incomes of up to 8.8 per cent and create almost 600,000 net new jobs over the next decade.
Ontario is providing a range of tax cuts, credits and benefits to help Ontarians:
- 93 per cent of income tax payers got an income tax cut on January 1, 2010.
- The Ontario Sales Tax Transition Benefit payments will provide up to $1,000 to most families (including single parents), or up to $300 for most single people.
- The new permanent Ontario Sales Tax Credit will provide low- to middle-income people up to $260 per person a year.
- Eligible low-and middle-income senior homeowners and tenants will also receive the new Ontario Property Tax Credit, providing seniors with up to $1,025 annually.
About 83 per cent of purchases will not see a change in tax as a result of the HST. Families will not pay tax on items such as basic groceries, prescription drugs, child care, residential rents and municipal public transit. Families will also not pay the provincial portion of the HST on items including children’s clothing, children’s footwear, diapers and books. A recent study using Statistics Canada database and Ministry of Finance data figures shows households earning $20,000-30,000 per year will save $550 in the first year of implementation of the tax plan.
The tax package is a key component of the five-year Open Ontario plan, which supports job creation and enhances the programs and services, including education, health care and skills training, that Ontarians value.
QUICK FACTS
- TELUS and other companies have said that Ontario’s tax changes could allow for greater investments in research, and development, and more skills training for workers.
- Ontario will have the lowest income tax rate in the country on the first $37,106 of taxable income.
- Effective today, the general Corporate Income Tax (CIT) rate has been lowered from 14 per cent to 12 per cent and then to 10 per cent over three years, the Corporate Income Tax rate on income from manufacturing and processing, mining, logging, farming and fishing has been lowered from 12 per cent to 10 per cent and the small business Corporate Income Tax rate has been cut from 5.5 per cent to 4.5 per cent
