More On The HST Debacle

Last modified on June 29th, 2011

One thing I’m getting consistently more and more frustrated with is how supporters of the HST keep telling me, via blog posts and interviews, that the HST results in me paying less money as a consumer. The problem is it hasn’t so far, nor do I think that it will for me personally.

Other than rebates for low-income families, the HST results in a tax increase on about 20% of purchases, most notably for me in restaurants and pubs. It’s a substantial increase of 7%, and I notice how much more expensive it is to eat out each and every time I go out to eat.

I also don’t really buy the argument that businesses will pass on their tax savings to consumers. As a business owner if you saw your profit suddenly go up 7% would be inclined to start throwing money down from the trees at your customers? Some might, but I doubt many would. It also doesn’t take into account the non-zero cost of actually lowering prices for most businesses (menus need to be reprinted, websites updated, etc). It’s a hassle and an expenditure that I doubt many businesses would go through.

The HST is good for business – some of my friends who own retail outlets say it’s a far better system. It’s also probably a good thing long term for this province. I can swallow all of that, and if it’s true, I think the HST should stay.

But I really wish people would stop telling me that I’m not paying any more as a consumer, because I definitely am.

2 responses to “More On The HST Debacle”

  1. Jen says:

    I can’t remember where I saw the study, but reading up on early HST info, and looking at long-term impacts by studying the VAT in the UK, apparently prices do go down… in about 10 years… when those companies who saved at the beginning need to compete on price.

  2. Darren says:

    Here’s a great breakdown of the differences between the PST and HST – thought you might be interested. I definitely feel as though I am paying more, but when I read an article like this, it reminds me why choosing the least evil tax system is best.

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