The Tax Plan is Working: For Consumers

The HST simplifies Ontario's tax system and eliminates tax hidden in the purchase price. In fact, Ontario's tax plan is saving businesses almost $4.5 billion a year in hidden taxes, when fully implemented. The result? Reduced business costs can mean more savings for consumers.

Lower prices

A report by University of Toronto professor Michael Smart confirms that Ontario businesses are passing on sales tax savings to Ontarians much sooner than expected.

 

 

 

Transitional support

The Ontario Sales Tax Transition Benefit provided an estimated $4.2 billion to about 6.6 million Ontario single people and families, part of the $12 billion in tax relief that Ontarians are receiving over three years as part of the tax plan.

HST rebates and exemptions

The HST is not charged on:

• Basic groceries
• Prescription drugs
• Certain medical devices
• Child care
• Residential rents
• Municipal public transit
• Most health and education services
• Legal aid
• Most financial services
• Tutoring
• Music lessons

Consumers do not have to pay the provincial portion (eight per cent) of the HST for:

• Qualifying prepared food and beverages sold for $4.00 or less
• Print newspapers
• Children's clothing and footwear
• Children's car seats and car booster seats
• Diapers
• Feminine hygiene products
• Books (including audio books)

Are you a homebuyer?

The HST does not apply to purchases of resale homes.

Buyers of new homes purchased as primary residences receive a rebate of up to $24,000 regardless of the price.

Buyers of new residential rental properties receive a similar rebate.

Previously in Ontario, PST was applied at every step in the creation of a product. Those charges were embedded in the price you paid at the store – even though you couldn't see them. And of course, you paid PST on the final purchase price. Under the HST, most of those embedded costs are removed and savings can be passed on.

What's taxable under the HST and what's not?

What tax benefits am I eligible for?

Who to call for more information

Some purchases do cost more under the new HST. However, 83 per cent of consumer purchases have not seen a new tax. In fact, on a number of items, prices will eventually come down.

Technical Paper on How the Tax Changes Affect People

When the Atlantic provinces harmonized with the federal GST, cost savings to business were passed through to consumers. This led to lower prices for some products.