HST is a small price to pay for prosperity
Published On Fri May 07 2010. Len Crispino President of the Ontario Chamber of Commerce
Since when have Ontarians not wanted to invest in a brighter future for their children? Who among us is satisfied with the status quo?
Figures estimating the impact of sales tax harmonization have reignited the debate about its merits. Estimates range from no impact to a decline in taxes for low income earners; a few hundred dollars or perhaps no impact at all for middle income earners; and over a thousand dollars for high income earners. Over the long term these impacts will lessen as a result of lower prices, higher wages and a stronger economy.
Naturally, no one wants to pay more taxes. Naturally, no one likes taxes at all. But is it safe to say that everyone values jobs? That everyone wants to see a booming economy versus a stagnating one? Wouldn’t we rather see businesses opening versus closing?
Evidence shows that an HST — or a value-added tax — is good for the economy. By eliminating the layers of taxation levied against products before they make it to the store shelf, a value-added tax makes it cheaper to produce goods and services. It makes our products more competitive in what is a global marketplace where competition is not just down the street, but across the ocean. Studies show it leads to lower prices.
The tax reforms announced in Ontario are long overdue. For many years Ontario has been losing its edge. A business that wished to invest was taxed far more per dollar here than it would have been had the owners put their money into another province or one of our key competitors in the U.S. As a result, fewer jobs were being created and, in fact, jobs were leaving Ontario. We’ve seen the evidence in some communities of boarded up windows and industrial lands left to waste.
For many years the Ontario Chamber of Commerce has advocated for significant changes to the tax system. We have invested in independent research in order to determine how best to transform the system so that Ontario would be a better place to live and do business. No single tax change is sufficient. It’s a combination of the right personal and corporate taxes, the right value-added tax and the right environment to encourage investment.
The tax reforms planned for Ontario will cut the rate of taxation on new investment by half, meaning that more businesses will expand and grow here. And that means more jobs. A study by Jack Mintz of the University of Calgary estimates almost 600,000 jobs will be created over 10 years.
This is the kind of Ontario we want. A place where new jobs are created and our stubborn unemployment rate is squashed. A place where our main streets are bustling. A place where people and jobs are attracted to a jurisdiction that is a magnet for the world because of its thriving economy. And where the strong economy generates the money needed for the services we have come to expect — high quality education and health care — and efficient roads and public transit.
Some of the most important public policy decisions have been difficult ones. The investment, for instance, in Ontario’s community college system more than 40 years ago, was not made without sacrifice. But where would we be today without those institutions?
Just as they continue to generate wealth by developing a workforce that is skilled and able to contribute to our innovative, knowledge-based economy, the tax reforms planned for Ontario will generate dividends for years to come.
A small investment now — understanding that studies show prices will go down and that more jobs will be created in the long term — is a small price to pay. Call it insurance. A small premium to ensure that down the road Ontario is once again the engine of the Canadian economy, and a thriving place in which to raise our families.
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