Any discussion on the changing of taxes results, understandably, in strong feelings. Already Manitoba is one of the highest taxed provinces in the country and Manitobans have every reason to say that enough is enough when it comes to tax increases.
For at least a decade, there has been discussion of a Harmonized Sales Tax (HST) in Canadian provinces. Over the past few weeks, this discussion has heated up in Manitoba as a result of most other provinces having moved to an HST or committed to one. A Harmonized Sales Tax would be the combination of the 7% Provincial Sales Tax (PST) with the 5% Goods and Services Tax (GST). Instead of seeing these two separate taxes on your sales receipt, there would be one 12% HST.
Many business groups support this proposal because they believe it would be more efficient to collect one tax instead of two and they would receive a rebate on the PST portion for the inputs and investments they make in their business. Those are legitimate points and the HST has the potential of benefiting the business community.
Consumer groups, however, have expressed concerned about moving to an HST because it would increase the amount of tax customers pay because the HST would apply to all goods, while the current PST has many exempt products. For example, currently there is no PST on goods such as home heating, gasoline, haircuts, movie tickets, home renovations and many other services. Only GST is currently applied to many of these items. If an HST were adopted by the provincial NDP government, it would apply to a much wider range of goods than the current PST so consumers would be paying this tax on more goods.
As a result, the NDP government would take in more money from the broader based HST leading many to justifiably be concerned that the HST could be nothing more than a tax grab intended to tax Manitobans even more than they currently are. And there couldn’t be a worse time to add to the tax burden of Manitobans.
Some Manitoba groups have put out their own alternatives. One suggestion that has been made is that the provincial part of the tax could be reduced from 7% to 5% so that a Harmonized Sales Tax would apply to a broader base of goods, but that the rate would be 10% instead of 12% so that Manitobans would save 2% on other goods that they purchase that now have a 12% combined tax. The idea being that while consumers would pay more for a few goods, they would pay less on many others, thereby balancing the cost out for Manitobans.
Unfortunately, it is difficult to discuss these alternatives because the Doer government refuses to release the analysis of what an HST would do to provincial revenues. The Department of Finance in Manitoba has been analyzing this issue for more than a decade and there is in-depth analysis about the costs and benefits of an HST but Mr. Doer refuses to share that and instead is making this decision secretively without allowing a real public debate.
Given the fact the NDP refuses to release any information about the impact of a Harmonized Sales Tax for our province, it is little wonder that many Manitobans feel it is nothing more than a tax grab and a way for the NDP to spend more of their money. This is too significant a change to the province’s tax system to be made behind closed doors and if Mr. Doer wants people to believe it is not just another NDP tax increase, he needs to release the analysis to prove it.
