Ontario truckers join pro-tax harmonization lobby coalition

TORONTO — A coalition of business and industry groups has formed to demonstrate the broad-based support for sales tax reform in Ontario.

The Smart Taxation Alliance includes the Ontario Trucking Association, Ontario Chamber of Commerce, AGS Automotive Systems, Canadian Chamber of Commerce, Canadian Council of Chief Executives, Canadian Manufacturer’s & Exporters Ontario, Certified General Accountants of Ontario, Ontario Road Builders Association, Retail Council of Canada, TD Bank Financial Group, and the Toronto Board of Trade.  

The coalition endorses the planned harmonization of the provincial sales tax with the federal GST as the most important measure available to stimulate economic recovery.

The group notes that British Columbia’s Finance Minister described the move to a harmonized tax as a way not to lose competitiveness with Ontario in the attraction of jobs during the critical time of economic recovery. 

A report published by TD Economics notes that the implementation of HST in Ontario will reduce business costs by billions of dollars, which in turn, will be passed on to consumers in the form of lower prices. 

It also points out that concerns of a large overall increase in consumer prices is overblown, and that it will not have an enduring effect on the inflation rate.

Positive impacts of a single sales tax, when combined with other announced tax reforms, will include:

Cutting the marginal effective tax rate on new investment in half; encouraging business investment in Ontario and the creation of jobs; cutting in half the red tape suffered by businesses in Ontario in the collection, remittance and auditing of sales taxes, for an estimated annual savings of $500 million; leveling the playing field with all goods and services in the economy so that all sectors contribute equally to revenue generation.

"The move to a harmonized sales tax will bring Ontario into the 21st century in terms of business input taxation and into conformity with tax norms in most of the world’s industrialized countries," states OTA President David Bradley, who adds that sales tax reform has been a key recommendation of virtually every OTA pre-budget submission of the past decade.

"For far too long the Ontario trucking industry and other business sectors have been living with a business input tax system that is archaic, regressive, uncompetitive compared to most other provinces and U.S. states and administratively burdensome."

He said that Ontario trucking companies currently administer three different sales tax systems — the PST, the Ontario Multi-Jurisdictional Vehicle Tax and the federal GST. "All of this combines to create a drag on investment in new equipment and technology."

To read comments from the heads of the other business groups, click here.