The provincial government in Ontario has proposed a new HST (Harmonized Sales Tax) that will merge the 8% PST and the 5% GST into a 13% HST. With legislative approval, this tax will come into effect on July 1, 2010. The proposed Ontario HST would reportedly remove $4.5 billion a year in embedded taxes. Many consumer items will receive HST exemptions, such as:

• Books
• Children’s Clothing
• Diapers
• Kid’s Car Seats
• Feminine Hygiene Products
• Newspaper and magazine subscriptions

Passenger transportation costs will  be affected by HST – while municipal/city transit and international travel will not be subject to HST, travel within Canada will be charged the full 13% HST; Canada-USA travel will be charge 5% GST.

While the Ontario government maintains that the proposed HST will save consumers and businesses billions of dollars every year, there are industry sectors that will suffer. Some who oppose the Ontario HST are labeling the tax the “Hated Sales Tax”. Bringing your pet to a veterinarian will also cost you 8% more, as will mailing a letter or switching on the lights in your home.