The Harmonized Sales Tax (HST)
Beginning July 1, 2010, the two sales taxes Ontarians pay (GST & PST) will be combined into one tax: the Harmonized Sales Tax (HST). What will this mean for people on OW and ODSP in Ontario?
What is the HST?
Currently Ontarians pay two taxes when we buy goods and services: the GST (a federal tax of 5%) and the PST (a provincial tax of 8%).
The HST will combine the GST and PST into one 13% sales tax. This means that we will pay the same total amount of tax for many things we buy as we did when we paid the GST and PST separately.
What’s different is that we will have to pay the HST on some goods and services that we didn’t have to pay PST on before. Some examples are home heating fuels and certain kinds of services.
Doesn't this just mean I'll have less money?
Everyone in Ontario will pay tax on some items and services they weren’t paying tax on in the past, so some things will cost more.
The government is making other changes to the tax system – higher tax credits and lower tax rates – that they say will help people deal with this extra expense. These changes are outlined on page 2.
There is one important thing to remember about the changes to the tax system – you have to file an income tax return every year to get the benefits of these changes.
What about people who don’t file tax returns?
The tax credits and reductions in personal income tax outlined on page 2 are meant to help make up for the new sales tax people will be paying.
For those people who don’t file taxes, the cost of the HST will be high. They will have no tax credits or income tax reductions to balance the additional sales tax on goods or services.
Those people on social assistance who don’t file tax returns will have to start doing so in order to get these benefits. Information on help with tax returns is on page 4.
To read the entire Fact Sheet, click here to download the Word Version.
The PDF version is available here.