The Town of Kirkland Lake is supporting a southern Ontario municipality in its efforts to make electricity exempt from harmonized sales tax, reasoning it will harm industry.
“I think, generally speaking, council thought that electricity prices is one of the prohibitive factors in industry … in Northern Ontario,” says Mayor Bill Enouy, saying it's already difficult to attract new business due to high transportation costs in Kirkland Lake.
“I don't see anybody wanting to put an extra charge on electricity.”
Council passed the resolution in July to support the Town of Innisfil in its efforts to lobby the government to re-examine electricity's inclusion in harmonized sales tax.
“It's not a big movement by us in Kirkland Lake to fight the government on this. It's more or less we support what the other group wanted to do. ... I just think it's reasonable for the government to look.”
The McGuinty government's harmonized sales tax, which is scheduled to come into
effect July 1, 2010, is the combined tax of five per cent federal GST and eight
per cent Ontario sales tax. This added level of tax will apply to items and
services that were previously exempt from sales tax, like electricity.
The Ontario government has said it is instituting the harmonized sales tax because it is the most efficient in the world today and will help the province recover after the economic downturn.
But in Kirkland Lake, residents are already straining under one of the province's highest municipal tax rates, although property assessments are relatively low. However, the mayor says that is not the reason the town is supporting Innisfil in a measure attempting to reduce taxes.
He says his concern isn't for big industries such as mining, which doesn't pay
tax on underground workings, but for small business owners and consumers.
“The bottom line is its going to cost the consumer in some areas where they weren't paying before."
The government should re-examine harmonized sales tax and the services that should be included under its umbrella, says Enouy.
Other goods and services that will be taxed that weren't previously are tobacco, membership fees for clubs and gyms, newspapers and magazines, personal services like haircuts, taxi fares and the professional services of lawyers, architects and accountants. Real estate commissions will also be taxed.
The harmonized sales tax is not going to very popular with the voters and less popular with people who want to get into business, he says.
Enouy says, as a mayor, he's closer to the electorate than the MPPs, and he's hearing harmonized sales tax is not popular.
“Most people hate this thing if you want to know the truth.”
