Wednesday, June 23, 2010

It Tastes Awful. And it Works.

Ontario was hit with an earthquake today, but the real question people are asking is whether or not the earth will move on July 1st. That's when the HST will be implemented - how Ontarians react may very well decide who wins next year's election.

Tim Hudak, who used to think the HST was a nifty idea and probably still does deep down inside, has spent the last year crusading against it. Twelve of the twenty press releases he's put out in June have specifically mentioned the HST. It's abundantly obvious Hudak wants to make the next election all about the HST, as he tries to become Ontario's version of Bill Vander Zalm.

McGuinty, meanwhile, has fought back with a TV ad:

In it, Dalton sits in the backyard and talks about the HST, calling it "strong medicine". I guess they've gone the Buckley's route on this one - "It tastes awful. And it works".

So it's cough medicine up against cotton candy. While voters generally prefer cotton candy, the Ontario Grits appear to be gambling that voters will trust the guy telling them the cough medicine will make their cough go away more than the guy telling them cotton candy will work just as well. That's why McGuinty is being featured prominently in the ads. Make him look like a strong leader who makes tough choices. He's the decider.

Personally, I don't doubt for a second the HST is good policy. Every expert says it is. Hell, Jim Flaherty says it is and he won an award for being the greatest Finance Minister ever or something like that.

Moving beyond all the rhetoric, I think it's clear some people will come out ahead and some will wind up behind. Some things will cost more and more will cost less. Why I think the province as a whole will come out ahead is that it will eliminate a lot of inefficiencies.

Revenue Minister John Wilkinson, who has the unenviable job of selling the HST, has a great anecdote about this. Currently, hospitals pay PST on bathroom supplies for visitor bathrooms...but not for patient bathrooms. So the Ontario government is literally paying people to inspect how toilet paper is used. He jokes about money being flushed down the drain, but I can think of more colourful metaphors to use.

It's for reasons like that I feel this will be a good move for Ontario on the whole. Politically, it all depends on whether Ontarians are willing to hold their noses and swallow the Buckley's.

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  • They swallowed Dolton McDinkAss, why not swallow his Buckley's?

    By Anonymous Jacques Beau Verte, at 11:06 PM  

  • I support the HST, and I'm a Tory. Does that make me a bad person?

    By Anonymous Anonymous, at 11:37 PM  

  • So to create more jobs we raise taxes?

    By Anonymous Anonymous, at 2:05 AM  

  • To create jobs we make our tax system more competitive. See the report here:

    By Anonymous Anonymous, at 8:34 AM  

  • Anon - the HST is actually a tax cut. That's why the federal government is sending Ontario money to implement it - to make up for lost revenue.

    The only difference is that "hidden" taxes at the production stages are being removed whereas some new taxes will be applied at the consumer stage.

    In effect, it's a massive business tax cut, which is why Tories SHOULD like it.

    By Blogger calgarygrit, at 10:33 AM  

  • You mean ANOTHER massive business tax cut, don't you?

    I've been watching governments provide business tax cuts for the last twenty or so years, and they've never lived up to the "promise" that doing so would create more jobs. That's a fiction. Business NEVER creates more jobs than it needs to get the work done, why would it?

    The main effect of business tax cuts seems to be increasingly higher compensation packages for executives, which are inordinately high relative to "front line" workers. That ratio is highest in North America, not Europe or Asia.

    If business wants to retain its position as pre-eminent determiners of fiscal and social policy, it's going to have to start delivering.

    Business may be the "engine" of society, but since when does the engine decide the direction of the car?

    By Blogger Party of One, at 11:05 AM  

  • Morontarians forgave and even re-elected Dalton McGint after he signed his name to a promise not to ever increase taxes .. and then slapped Morontarians with a Healthcare Tax.

    He got re-elected by spooking Morontarians about their public school system being threatened by the Conservative Tory funding ethnic schools. Oh, Morontarians have their priorities really set straight..!!!

    "Hit us with a HST!!", cry Morontarians ... and send money to Quebec too because we love punishment.

    By Anonymous Myron, at 11:21 AM  

  • Dalton has admitted that the HST is in fact a HUGE tax grab for Ontario, because it applies to so many more things that weren't subject to one of the GST or PST previously.

    It is not a tax cut for business, either: PST rebates were available previously for goods for sale; taxes must be paid for goods consumed in the course of business (as an end-user). That it is slightly more efficient as a system is what makes an HST system better; using it to add new taxes is terrible policy.

    And no, the $4B from the federal government is NOT to make it neutral: it's largely to fund "bribes" - cheques which the Liberals are sending out claiming to adjust for the added costs which the HST will impose. (Note: my cheque still hasn't arrived. But unfair distribution practices have never bothered our Liberal Premier.)

    By Anonymous Anonymous, at 12:19 PM  

  • @Myron: Don't forget it was "flim flam" Flaherty that left Ontario with a hidden $5 BILLION defecit when he and the other Cons got their asses booted out of power.

    What did McGuinty do? He did what he needed to do to bring stability back to the economy.

    Now Ontario has a $25 Billion defecit. How do we reduce it? We either cut services, or introduce the HST.

    The HST is being used in other provinces and I don't hear anyone of them complain and since the Minister of Finance (flim flam Flaherty) endorses it and by default the Federal Government, I would suggest all you Conbots stop repeating, verbatim, the talking points.

    By Blogger Big Winnie, at 1:54 PM  

  • calgarygrit said...
    "In effect, it's a massive business tax cut, which is why Tories SHOULD like it."

    No 'in effect' about it, this definitely helps business, and certainly the industry I'm in. And this old Red Tory approves.

    Hudak is opposing simply for political advantage. CITY-TV already cornered him and asked point blank if he'd rescind the HST if elected. The response:(sound of crickets) "...well, um, believe you me a Conservative government would reduce taxes." Ya right Hudak, you know the HST is the right thing to do, and your federal cousins in Ottawa agree.

    Hell, the NDP should be for it as well ...since when did the Dippers ever meet a tax they didn't like? The only 'lossers' in the HST are those who consume a lot - and last time I checked that was the upper classes. The NDP is all about eating the rich, so their opposition is also suspect.

    Also almost never mentioned in the debate is the fact that Ontario's personal income tax rate is being reduced, and not insignificantly. And the more we can do to eventually eliminate this slimy illegitimate tax, the better.

    By Blogger Tof KW, at 2:08 PM  

  • Anon 12:19 - OK, let's say it's a tax grab. So the gov is getting more revnue.

    Plus they get the 4B from the feds.

    So, presumably all this extra revenue will be used to either pay down the deficit, increase services, or cut taxes, right?

    By Blogger calgarygrit, at 5:07 PM  

  • I wonder if these are the same great experts who told us how good the Gouge & Screw tax (a.k.a. GST) was going to be for us. What did it do? Cause enormous number of retail bankruptcies as people went on an orgy of cross-border shopping to escape it. It was in all the papers. How convenient for those great experts to forget this. Even today BC has a problem with people going to shop in Alberta for their much lower tax rate. And Alberta didn't even HAVE a retail sales tax before the GST. Didn't seem to hurt the province any. So much for all the experts.

    By Anonymous S. Wolf, at 5:22 PM  

  • Too, if they want efficiency, why do do it right? Scrap ALL sales taxes and go with a sinmple, FAIR, 'flat' Income Tax. One tax, one time, one place. What could be simpler than that? And it takes ABILITY TO PAY into account, something the unfair sales taxes do not. Obviously my Income Tax would rise, but I could live with this if it meand I got to KEEP what was left instead of being nickle and dimed away by all the other taxes and fees. Simple? Fair? I guess no politician would ever go for it.

    By Anonymous S. Wolf, at 5:31 PM  

  • It would be better if hospitals, schools paid no taxes. We are taking money from one pocket to the other. Ontario manufacturers pay hardly any PST now. No manufacturer will reduce prices,the comparison to the Maritimes ( who had no exemptions to tax and a much higher sales tax) are moraly wrong and valid only for political purposes. McGinty likes it for the large tax revenue it will produce. 600000 jobs, no way to say it will be HST produced. The arguments are without logic and are spureous

    By Blogger john, at 6:15 PM  

  • Wolf - most people will admit the GST was a good tax, even if it was unpopular.

    By Blogger calgarygrit, at 2:32 PM  

  • The guy is definitely right, and there's no question.

    By Anonymous, at 10:42 AM  

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