Harmonized Sales Tax

On July 1st of this year, we're harmonizing the provincial PST and federal GST into a single, Harmonized Sales Tax (HST).

Why? Our current sales tax system is outdated and burdensome.

• In the current system, sales tax is applied at every step of the process – from raw materials, to manufacturing, to retail. That 8% applied at one step gets taxed again at the next step! That's called a "cascading tax," and it's expensive. Right now, it gets passed on to consumers in the form of higher prices.
• Businesses currently spend an extra $500 million per year on paperwork, submitting two sets of tax forms to two different levels of government. These costs also get passed on to consumers.

This doesn't make sense. Our competitors know it – that’s why 140 other countries have moved to a single, value-added tax system.

Our move to HST will eliminate both of these added costs, making Ontario businesses more competitive globally—and helping to create good jobs and boost our economy here at home. As we emerge from the global recession, it's more important than ever.

**You may have heard that the cost is going to go up "on everything." That's not true. In fact, 83% of the things you buy won't see any new tax! That includes your morning coffee, your kids' clothes (and your clothes), and your cell phone bill. For more information about exemptions, please click here.

Income Tax Cuts

And as part of our comprehensive tax plan, we've cut personal provincial income tax for 93% of Ontario taxpayers as of January 1st.

• 90,000 low-income Ontarians will no longer pay provincial income tax.
• Families and individuals with up to $80,000 of income are getting an average personal income tax cut of 10%.
• Eligible families with an annual income of up to $160,000 will get three transition payments totalling $1,000 to help with the move to HST.
• Eligible individuals with an annual income below $80,000 will get three transition payments totalling $300.
• Our new, permanent sales tax credit of up to $260 for each adult and child per year will benefit almost 3 million low-income Ontario families.

Our tax reform package is a comprehensive solution that will help our economy in these challenging times, while helping families through the transition and providing permanent personal income tax cuts. It's good for business, and it's good for families.

Learn more about comprehensive tax package Ontario's