August 15, 2009
Editor’s Note: LO executive director Tony DiGiovanni has requested  that members write Premier McGuinty, asking his government to reconsider an exemption of labour-intensive services in the HST (harmonized tax system) proposals. An outline on the HST tax changes can be found within the accompanying article.

An LO member quickly responded to the LO director’s request, writing the following letter. We think he reflects the opinions being expressed by the vast majority of LO members. The author has requested that his name and the name of his company be withheld from the published letter.  

Mr. McGuinty,

I appreciate your response to my previous letter, although it will take much more than that to convince me, a small business owner, contractor, homeowner, husband and father, that your proposed changes to the PST system will not severely hamper my ability to carry on my business and not cost myself and my family significantly more money each year.

Running four small businesses in Ontario is no easy feat. I understand the current system and I also have a good understanding of the changes you propose and how they will actually affect our lives and the economy of the province. Bottom line is that so many services that were never taxed before, things like bank fees, insurance policies, lawyers, accountants, architects, designers, on and on the list goes (basically everyone who ever rendered a service in the past) is going to be required to charge their clients eight per cent more. These service-based businesses alone will add millions (if not billions) to the provincial coffers, while becoming more expensive to the average consumer.

In my operations, I have done the math. On an average job that I supply to a client, I would have paid $800 in PST on the component inputs and built this into the cost of the systems I install. With your new system, I will have to add $2,356 on to my final invoice just to cover the eight per cent of the final bill. This represents a $1,556 increase in taxes on the services I offer to my client! And you say that this new system will be revenue neutral?  

Hog wash.

Premier, the citizens and business owners of this province are not dumb. This new tax system is going to cost us dearly. We know it and you know it. Trying to implement this during a massive economic downturn is asinine. I firmly believe that this measure alone could cripple small service-based businesses and result in more closures and job losses. Stop trying to line the Province’s coffers on the backs of the average citizens.

I urge you to reconsider your position and look at this from our point of view. I also urge you to consider making this an election issue. That’s right, call an election and make the blending of the PST and GST your platform. That should give you the answers (but I strongly doubt the approval, or the mandate) you are looking for from the citizens of this over-burdened yet still great province.

Best of luck.