The Greater Fort Erie Chamber of Commerce

Sales tax reform aids consumers, government

and business: Report

 

For Immediate Release

January 22, 2009

 

FORT ERIE:  Supporters are rallying behind a comprehensive report on sales tax reform in Ontario, as one of the most effective ways to combat the economic challenges facing the province.  Prepared for the Ontario Chamber of Commerce, the report demonstrates that Ontario households, businesses and government will all benefit from reform of Ontario’s sales tax.

 

“Harmonization of Ontario’s sales tax with the GST will lead to a stronger economy with higher real wages, a higher standard of living, higher productivity, lower business costs, and increased investment,” explains Kim Zanko, President of the Greater Fort Erie Chamber of Commerce.

 

“ This is one of the most important policy directions we can put in place today to position us for a strong recovery at the end of our current economic difficulties,” adds Len Crispino, President & CEO of the Ontario Chamber of Commerce.  “Our research has disproven all of the common objections to sales tax reform, providing the opportunity for the province and the federal government to make a serious commitment to enter into negotiations in order to make it happen.”

 

The report points out that there is currently a willingness federally to work with provinces wishing to harmonize their sales taxes, and demonstrates that harmonization in Ontario will give the federal government the fiscal room to provide compensation to offset any short term loss in provincial revenues.

 

Made in Ontario, The case for sales tax harmonization illustrates three potential options for the harmonization of Ontario’s sales tax with the GST:

·         a simple harmonization which replaces the PST with an 8% tax harmonized with GST

·         Made-in-Ontario alternative A which exempts the purchases of children’s clothing, “clean” energy, labour intensive services and the MASH sector (Municipal, Academic, Schools, Hospitals) from the Ontario portion, and

·         Made-in-Ontario alternative B which zero-rates financial services from the Ontario portion

All three options build in an Ontario sales tax credit for low income Ontarians.  In addition, the alternative models provide opportunities for government to advance such things as a poverty agenda, incentives for green technology, and support for municipalities in terms of their burgeoning infrastructure deficit.

 

“Companies in Greater Fort Erie are in need of a lower cost of doing business so that they may be more competitive in the long run,” emphasizes Zanko.  “Smart tax policy just makes sense.”

 

 

The report was released today in Toronto and other communities throughout the province.  It can be found at  www.occ.on.ca or by clicking this link: files/Sales%20Tax%20Report_High%20Quality.pdf