Global Biz
Canada passes bill to harmonize sales tax in provinces
(Xinhua)
Updated: 2009-12-10 14:59
OTTAWA: Canada's parliament on Wednesday passed a controversial bill allowing the combination of federal and provincial sales taxes in two provinces.
The bill will allow the provinces of Ontario and British Columbia to blend their provincial sales tax (PST), currently 8 percent in Ontario and 7 percent in BC, with the five percent federal goods and services tax (GST).
While the provinces and Ottawa argue that the change will save business millions in taxes as the government bundles in administrative costs, which is a positive measure for the economy, critics say it will hurt citizens as harmonization will result in taxation of items that previously did not carry provincial taxes.
The Liberal Party, the Conservative Party and the Bloc Quebecois all voted in favor of the measure. The New Democratic Party (NDP) was the only party to oppose it.
"We think it's the wrong tax, it's a hardship that will be put on the backs of millions of Canadians," NDP Leader Jack Layton told reporters after the vote.
Earlier Wednesday, the Ontario legislature passed its own legislation and BC is expected to follow suit early in the new year. New Brunswick, Nova Scotia and Newfoundland and Labrador provinces have already adopted the harmonized sales tax (HST). Other provinces still have the two-level sales tax system.
The current multi-level value-added sales tax system of Canada was introduced in 1991 by Prime Minister Brian Mulroney.
