TORONTO -- The plan to harmonize federal and provincial sales tax brought traffic to a halt in downtown Toronto yesterday afternoon.
Members of the First Nations community, who stand to lose their point-of-sale provincial sales tax rebate under the proposal, repeatedly blocked cars on Queen's Park Circle.
Drivers honked with frustration at the protest, which occurred during rush hour.
Grand Council Chief Patrick Madahbee said First Nations are drawing a "line in the sand" over the proposed HST which he said will add 13% on the cost of most purchases.
Aboriginals are exempt from paying sales tax but are required to cover the GST at the cash register and then apply for a rebate.
Ontario Finance Minister Dwight Duncan said the province believes aboriginals should get the same point-of-sale rebate for the HST that they currently receive with the PST.
However, the feds are collecting the HST on behalf of both levels of government and are not offering the cash register exemption.
Federal HST legislation, which permits both Ontario and B.C. to harmonize its sales taxes, breezed through the House of Commons yesterday. The passage of companion HST legislation in Ontario has proven more contentious but it is expected to pass by next Wednesday.
Members of the Ontario government's Standing Committee on Finance and Economic Affairs got an earful yesterday on the first of two days of public consultations on the bill.
While several deputations favoured a harmonized sales tax as a way to make business more efficient and create jobs, the majority of people who appeared before the committee expressed strong reservations about the tax plan.
Organizations as diverse as the Ontario Camps Association, the Canadian Taxpayers Federation, the Ontario Real Estate Association (OREA) and fitness clubs objected to the additional 8% tax on a wide variety of services not currently subject to provincial sales tax.
"Where government changes tax policy, it ultimately creates winners and losers," OREA president Pauline Aunger said. "In this case, manufacturers are the winners and the service sector are the losers."
Duncan said the government is aware that the public still has questions about the HST. "It's almost counter-intuitive for people sometimes because it's a very complicated package," he said. "So we still have a lot of work ahead of us to help educate Ontarians about this, why so many economists and others have come out in strong support of it."
The opposition parties at Queen's Park said average people will be hurt when the 8% PST is slapped on gasoline, home heating, lawyer and accountant fees and a host of other items and services.
"Consistently, the message coming from the deputations, coming from everyday Ontarians, is that they oppose this tax grab," Tory MPP Lisa MacLeod said.
"They want more time to digest it, they want more time to change it ... One message that was resoundingly clear today was that this tax will be a job killer."
ANTONELLA.ARTUSO@SUNMEDIA.CA
