From children’s sports activities and home renos to simply driving around, life is about to get more expensive in Ontario.
BY TINA TEHRANCHIAN
On July 1, the Ontario government will introduce the new Harmonized Sales Tax (HST). This means that certain purchases that were only subject to the 5% Goods and Services Tax (GST) before this date, will soon be subject to the 13% HST instead.
While the effect will be minor on certain items, it can make a huge difference on bigger ticket items and you should prepare yourself and take advantage of the window of opportunity that exists before July 1.
The following are the major changes that you will experience as a consumer and some financial planning tips for dealing with the upcoming changes and minimizing their impact.
Food and Beverages
Food and beverages are a major expenditure for most families. The good news is that no HST will be charged on basic groceries. Qualifying prepared food and beverages sold for $4 or less will also be only subject to the GST.
The bad news is that alcohol beverages – currently subject to a 10-12% Retail Sales Tax rather than the 8% Provincial Sales Tax – will not go down in price despite being subject to the HST after July 1. This is because the Liquor Control Board of Ontario (LCBO)’s policy of “social responsibility” dissuades a price reduction to keep alcohol abuse and drinkdriving in check.
The services in this category that will be subject to HST include electricity and heating, Internet access services, home service calls by electricians, plumbers, carpenters, as well as landscaping, lawn-care and private snow removal services.
While you cannot do much about your ongoing electricity and heating bills, you’d better fix your leaky faucet, repair your furnace or electrical wiring and put your lawn maintenance and snow removal contracts in place before July 1 to save the additional 8% you would need to pay on these services.