While Canada Revenue Agency’s website states that signing up for direct deposit for HST/GST and OSTTB rebates is more efficient, the site also states that if individuals only recently signed up for the rebates to be deposited directly, cheques may still be mailed for this payment until the direct deposit information is processed. For those who already have direct deposit information on file, CRA is expected to deposit the rebate anytime after June 10, 2011 according to their website.

Residents who filed 2010 taxes after May 9, 2011 can also expect delays in receiving the OSTTB rebate cheque as the CRA has cited a processing period of 6 to 8 weeks. This places the receipt of the cheque anywhere between late June and early July.

To further add complications to the situation, although Canada Post initially assured customers that important government cheques would be mailed on schedule, today’s official lock-out announcement will pose increasing delays for all mail across Canada.

In a statement released earlier today (June 14, 2011), Canada Post cited upwards of $100 million in losses by implementing 12 days of rotating strikes nationwide. Rising safety concerns and continued difficulties in negotiations have forced the company to shut down until further notice. Canada Post is said to clear any mail that has remained in their system until June 14 but will not be continuing regular operations until an agreement has been reached.

Canada Revenue Agency has also cited that during a postal strike or lockout, only the core government-issued cheques will be mailed out on the 20th of each month; a slight delay in payments.

The following list are cheques that will continue to make their way to residents during the lockout

(as cited by CRA (http://www.cra-arc.gc.ca/gncy/pstlstrk/menu-eng.html):

• Canada child tax benefit (CCTB)
• Provincial/territorial benefits that are combined with the CCTB:
  • British Columbia family bonus
  • New Brunswick child tax benefit
  • Child benefit for Newfoundland and Labrador, Nova Scotia, Nunavut, Northwest Territories, Yukon, Ontario, and Saskatchewan
• Old Age Security (OAS)
• Canada Pension Plan (CPP)
• Guaranteed Income Supplement (GIS)

Unfortunately for residents who are counting on rebates to assist with every day life, these delays are costly. One can only hope that negotiations will continue with Canada Post and that Canada Revenue Agency will not use the lockout as an excuse for late payments for too long.

While some financial institutions will process and accept postdated cheques prior to the date, Ontario Ministry representatives are recommending that citizens wait to cash or deposit cheques. Currently the only financial institution confirming the early rejection of processing the HST cheques is TD Financial. According to Ministry spokesperson Scott Blodgett, individuals may run into problems with processing if they attempt to deal with the cheques before the set date.

While Ontario residents receive their last HST transition cheques, B.C. residents continue to get mixed messages from opposing and supporting camps of the system ahead of the upcoming referendum.

The provincial NDP party of B.C. officially launched their anti-HST campaign Tuesday in response to the $5 million campaign released by the B.C. Government. NDP Leader Adrian Nix continues his quest to outlaw the taxation system claiming that “the HST is a massive transfer of the tax burden away from big businesses and onto the back of working and middle class families.”

Former premier Bill Vander Zalm is also continuing his anti-HST campaign going so far as to offer a $1,000 prize for the individual or group to post the best online video promoting the tax elimination.

Business groups and government forums are still occurring throughout the province promoting the HST as a ’smarter’ tax alternative and urging residents to consider the system. As the referendum date nears, recent polls suggest that B.C. residents are split on their decision. And while Ontario residents will not be headed to the polls to determine the fate of their harmonized tax system, the outcome of the provincial election in October is predicted to directly reflect residents’ sentiments on the matter.

The provincial government in B.C. has also sent out welfare cheques early to side-step the possible ramifications of a postal strike including delay of payments.

Last week Canada Post assured Canadians that tax rebate cheques, government services and programs will be mailed out even if a strike occurs. After reaching an agreement with the union it was decided that volunteer mail sorters will be used in order to prevent any disruptions in regular services.

Finance minister Dwight Duncan was especially concerned that the final HST transition cheques for Ontario residents be delivered on schedule even going so far as to write to federal Finance Minister Flaherty on the matter. Duncan, a strong believer in the HST program as it relates to Ontario’s economy stressed the importance of a seamless transition without disruption. Duncan also requested that any government program cheques be given priority mailing status.

B.C. residents find themselves in a similar situation regarding the postal service, however, more notably as it relates to the HST Referendum in June. Possible disruptions in the mailing of ballots to residents as well as mailings to Elections B.C. will need to be addressed by the chief electoral officer according to B.C. Finance Minister Kevin Falcon.

Falcon remains confident that B.C. residents will get their vote provided the chief electoral officer prepares for any unforeseen circumstances while still abiding by the Referendum Act. Voters are scheduled to receive mail-in ballots between June 13 and June 24.

Meanwhile, labour talks continue to negotiate a suitable contract for some 50,000 workers. The latest proposal was received on Sunday night and is currently under review. Both sides are committed to reaching a deal soon to avert a potential postal crisis.

The Fight HST campaign, organized by Vander Zalm has been actively promoting rallies and protests since last year’s implementation of the HST. Four rallies directly targeted Liberal MLAs who supported the tax in regions throughout the province. Unfortunately, none of the recall petitions were successful in ousting the targeted politicians from their posts. The last effort was made in the Maple Ridge-Mission riding east of Vancouver. Unable to secure the required 40 per cent support for the petition, organizers withdrew the recall application.  Other ridings that were targeted included: Oak Bay-Gordon Head, Comox and Kamloops-North Thompson.

Although the recalls were unsuccessful, Vander Zalm’s Fight HST campaign is directly responsible for the calling of the referendum after the group successfully collected more than 500,000 signatures.

The report from the BC government in support of the HST is said to surface at the beginning of May published by an independent panel. The original deadline for the release of the report was extended to accommodate the recent federal election call.

Meanwhile, the fourth round of HST rebate cheques have made their way to low-income families and individuals in BC. And as the anticipated date for the HST referendum nears closer, residents will soon be receiving ballots for the June 24 vote. Ballots are scheduled to be mailed mid-June allowing residents to ponder their decision and mail in their responses.

In addition to ballots, residents can expect a voter’s guide in the mail to help in the decision process. The government has budgeted $1.7 million for a public information campaign educating voters on both sides of the HST issue. Attorney General Barry Penner has appointed the Honourable Stephen Owen to oversee the distribution of the “[...]comprehensive voters’ guide to every home in the province.” Funding is said to be equally distributed between the anti-HST and pro-HST campaigns leading up to the referendum.

Since the implementation of the Harmonized Sales Tax in Ontario and British Columbia, residents, when filing taxes on their personal tax software, have begun to receive HST credit and transition cheques from the government as a way to adjust to the new taxation system. As with the HST system, there are many questions surrounding the cheques and who is eligible, when to expect the payments and how to go about applying to receive a cheque.

Ontario Sales Tax Transition Benefit (OSTTB)

First and foremost, in order to receive a HST transition cheque or OSTTB you must file your income taxes for 2009 by April 30, 2011 and file your 2010 returns by April 30, 2012. Based on your return and income earned, your cheque amount will be determined and issued. HST cheques will be issued to singles with an income lower than $82,000 (net income) or couples/families with an income less than $166,000. You do not have to fill out any separate forms in order to receive cheques as Canada Revenue Agency works in conjunction with the HST rebate program. GST rebates for lower income residents and HST cheques are issued together.

For single Ontario residents within the income range listed above, you can expect to receive three cheques of up to $100 per cheque for a total maximum benefit amount of $300. Couples and families can expect HST cheques of up to $330 per cheque ($335 for the second and third cheques) for a total maximum benefit amount of $1000.

Dates for the cheques for Ontario residents are as follows:  June 2010, December 2010 and June 2011. In the event that you file your income taxes late, HST benefit cheques will be delayed for approximately eight weeks for processing. To ensure that you receive the HST cheque you deserve, be sure to file your income taxes on time.

Further requirements to be an eligible recipient for the June 2010 and December 2010 payment:

• must be 18 years or older
• are married or common-law or
• live with one or more dependants under the age of 18

You must also have been a resident of Canada on December 31, 2009 and of Ontario on May 31, 2010 and November 30, 2010.

In order to receive the June 2011 benefit payment, the recipients must:

• be a resident of Canada on December 31, 2010 and file a 2010 income tax return by April 30, 2012 or if not resident in Canada on December 31, 2010, provide a statement of 2010 world income to CRA, by April 30, 2012; and
• be a resident of Ontario on May 31, 2011.

*Note that the OSTTB is a temporary payment program designed to help residents adjust to the HST implementation. No payments will be issued after April 30, 2013.

B.C. HST Credit Cheques

For BC residents, the qualifications and requirements are slightly different than for residents in Ontario. In order to receive a BC HST cheque, residents are required to file income taxes with Canada Revenue Agency as well as fill out a benefit return with your taxes by checking ‘Yes’ in the GST/HST credit application area.

For individuals applying for the credit cheques, you can expect up to $230 with a maximum annual income of $20,000. Families can expect $230 per person with a maximum annual income of $25,000. Partial credits are also available based on income and number of family members per household at a reduction rate of 4% of your net income over the allowable threshold.

HST credit cheques are issued quarterly and can be expected in the months of January, April, July and October.

Additional requirements to ensure you will receive the HST Credit (HSTC) include:

• you must be 19 years of age or older
• you are married or live common-law or
• you live with one or more dependants under the age of 18

Be sure to check out related tax websites for further information and to ensure you determine your eligibility for HST cheques.

The year opened with Ontario Liberal leaders assuring citizens that there will be no major changes to the taxation system in 2011 and to expect the 10% rebate on electricity bills as announced in November, to off-set the hydro bill increase due to HST implementation last July.

As provincial hydro bills are predicted to increase annually by 3.5% over the next 20 years, the government is offering customers what some are calling a consolation prize rebate.  At first glance the 10% electricity rebate appears to be helpful for hydro customers who have experienced a drastic bill increase over the past few years, however, as NDP leaders have pointed out, July 1 of last year already marked an 8% rise in hydro bills due to the addition of the provincial portion of the HST being incorporated.

And while some hydro customers will reap early benefits of the rebate this month, others will have to wait till early summer or fall if on a time-of-use “smart meters” billing system that varies depending on the seasons and time of day.  These lowered rates will be in effect beginning May 1.

Ontario residents will also receive the last of the 3 HST rebate cheques in June this year to adjust to the 13% HST. Residents can expect to receive up to $300 per single and $1000 per family. Though the Liberals are opening the year putting money in citizen’s pockets, and promising to leave the taxation system alone, it is too soon  to tell whether this will hold true being a mere few weeks into 2011—and this being an election year.

Maintenance services home-owners often take advantage of, such as lawn care, house cleaning, renovations services and major appliance repair (fridges, stoves, etc) will now be subject to 12% HST instead of the 5% GST. Repair of electronic items such as stereo equipment or computers was always subject to 5% GST and 7% PST, so the new 12% HST doesn’t change the amount of tax due.

Home insurance remains exempt from HST. Residential heat and electricity services is subject to the 12% HST, but a 7% Residential Energy Rebate applies to the PST portion of the tax, which reduces the total tax paid to 5%.Before HST came into play there was a small Innovative Clean Energy levy added to electricity bills which has now been eliminated.

Other Resources:

Ontario HST on Home Services

Eligible individuals and families will receive 3 tax free payments in June 2010, December 2010 and June 2011. Individuals will receive a maximum of $300 paid in $100 amounts on the dates listed here. Eligible single parents and couples will receive up to a maximum of $1000 spread out over those sames dates. Single individuals earning more than $82,000/year will not receive HST transition cheques. Single parents or couples that earn more then $166,700 will not receive HST transition cheques either.

If you’re eligible, you must file your tax return to receive the cheque. There are a number of reasons that could potentially lead to “missing” HST cheques, as HSTinCanada has received numerous emails from people who believe they should have already received a cheque. If the CRA is expecting your spouse to file their taxes and they haven’t year, you won’t receive your HST cheque. Late filers can still receive the HST transition cheques; they will be cut approximately 8 weeks after CRA has received your income tax return.

If you are filing late, don’t delay too long! Taxes files over 1 year late forfeit the right to receive HST transition cheques.

At the 2005 National Sales Tax Symposium David Robertson presented a paper that compared the current taxation system with a value added tax. His findings suggested that “the VAT is more equitable, less regressive, less susceptible to evasion and does not limit international competitiveness and domestic prosperity in the dramatic way that RSTs do.”

Follow this link to read SALES TAX HARMONIZATON: THE FACTS & NOTHING BUT THE FACTS

Below David gives a brief example of  how a harmonized tax can help Provinces:

I realize that because of the broadening of the tax base, the conversion from PST to HST is unpopular. However, it is a very important step from a public and tax policy perspective.

To provide you a practical example: Last week a US client contacted me. They are looking to put a facility in Western Canada. Their total up front investment will be about $20M to construct and commission the new facility. The facility will employ 50 full-time employees year-round, and an additional 50 people during certain seasons. The question the client put to me was: Are there any tax reasons why it would be better to put the facility in Calgary versus Vancouver?

BC and Alberta’s corporate income tax rate will both be at 10% in 2011 — when the facility will be constructed — so there is no tax advantage there.

Both BC and Alberta have eliminated their corporate capital tax, so once again, one province does not have an advantage over the other.

However, historically, BC has had PST — a sales and use tax — which taxes business inputs. Alberta does not. Historically, I would have told the client to put the facility in Alberta because if they invest $20M in constructing their facility and purchasing the equipment to be used within it, they would face a PST cost in BC between $700,000 to $1.4 M. They would not face this cost if they put the facility in Calgary.

With the elimination of PST in British Columbia and its harmonization with the federal GST/HST, this competitive advantage that Alberta currently has will be eliminated. The client can build the facility in British Columbia, and bring with it 50 brand new full-time and 50 brand new seasonal jobs to the province.

The same issue arises for the film and high tech industries. Those industries currently pay PST on all the equipment they purchase and rent (i.e. computers, lighting equipment, boom trucks, computer servers, computer software, etc.). BC competes with Ontario — particular for film work and the high paying jobs that come with it. When Ontario announced that it was eliminating its PST and harmonizing with the HST, British Columbia truly had no choice but to do the same.

When the premier and finance minister of British Columbia said that their government chose to harmonize to preserve and create jobs in British Columbia, this wasn’t some political platitude. They truly were harmonizing to preserve and create jobs in BC.

In this video Bill Vanderzalm discusses how HST will affect businesses in British Columbia, both big and small. Bill doesn’t feel BC HST will create economic stability, even though there may be some financial benefits for businesses, especially large businesses.