The birth of HST in Ontario has arrived. I doubt if anyone will be handing out cigars – on second thought, maybe Dalton McGuinty will. Compared to British Columbia, the first step in selling the HST to Ontarians has gone down like an Oceans 11 movie. The tax will probably have a longer life than any of us – sadly, taxes never die; and most of you will by now have received your “bribe cheque”, as many people are calling it. But I am wondering if a bribe today will quell the building anger over the next few months as people see the cost of living in Ontario go up yet again.
Brian Mulroney gave us GST. You may remember that he went from a majority government to holding his caucus meetings in a phone booth because of the hated tax. He never suspected that taxpayers were prepared to respond with such collective retaliation. He underestimated, or possibly misinterpreted just how strongly people felt about the issue even if they didn’t march in the street. It became a life lesson for every politician in Canada that we don’t always say everything we are thinking.
Although Wilmot Township’s taxpayers haven’t marched in the streets in a HST tax revolt (it just isn’t our style), I am convinced that the modest reaction to such a significant increase in taxes does not mean that we believe what we have been told about the tax. In fact, the most common response to questions about the tax is that people don’t believe the government about the personal impact of the HST. They are suspicious and cynical about the cost. They may have been reflecting on the Smart Meter Answer Book which Mr. McGuinty distributed across the province. We were told, as you may remember, that the new system was a way for us all to save money on our electric bill – NOT. In reality, hydro prices for the same usage were increasing significantly. If you wanted to save money you would have to cook your meals and do your laundry between 9 pm and 7 am – a bit inconvenient for most of us to say the least. The “spin-doctors” where working overtime and what we were “sold” and what we got were very different.
With the G20 ending, some economists suggest that we have entered into a world-wide third depression which they are calling the Long Depression characterized by deflation and continued unemployment. Ontario’s manufacturing sector (our greatest strength) has been destroyed over the last 20 years by NAFTA and globalism in general. The challenges the province faces are of a grand scale and the remedies (if there are any) are multifaceted. Raising taxes seems like the easy way out again. But my conflict with Mr. McGuinty is that we have been sold the HST with less than half truths; in particular, how higher taxes will increase employment and make all of Ontario more prosperous. If there was any truth to that, I would be the first to suggest doubling taxes. I understand the cynicism among taxpayers because what we are being sold and what we will get I think will be quite different.
Over the next few months the illusions about HST will fade and reality will become evident. If Mr. McGuinty has oversold his “product” there will be a great deal of anger and possibly voter retaliation to a government which has “ zoomed” us yet again. Sadly, by then it will be too late for taxpayers. Rarely are bad taxes ever repealed even by the succeeding government. If nothing more, we will be reminded of the old adage: “if it sounds too good to be true, it probably is”.