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FOR IMMEDIATE RELEASE
June 29, 2010
OTTAWA – The Chemistry Industry Association of Canada welcomes the introduction of Ontario’s harmonized sales tax (HST), and an end to the double-taxation of Ontario’s manufacturing sector.
As of July 1, a 13 per cent HST will replace the province’s 8 per cent provincial sales tax (PST) and the 5 per cent federal goods and services tax (GST).
“The HST is crucial to both the short-term recovery and the long-term prosperity of Ontario’s manufacturing sector,” says Richard Paton, President and CEO of the Chemistry Industry Association of Canada. “This was a much-needed first step to help make Ontario manufacturers more competitive, to encourage investment and innovation, and to safeguard Ontario manufacturing jobs.”
The HST is the first step in making Ontario manufacturers more competitive
With the introduction of the HST, manufacturers will be able to claim all of the sales tax they pay on the goods and services purchased to run their operations. Before the HST was introduced, nearly 40 per cent of the province’s PST revenue – about $5 billion annually – came from purchases businesses made: from machinery and vehicles, to energy and office supplies. In addition to this “input tax”, manufacturers also faced an “output tax” on the final products they sold – amounting to double-taxation. Unlike the GST, the PST couldn’t be claimed back as a tax credit. Plus, Ontario manufacturers spent millions of dollars annually on administrative costs to collect and remit separate federal and provincial sales taxes.
While some Ontarians may find it difficult to see value in the government’s decision to apply the HST to services that were previously PST-exempt, the benefits the HST will have for the overall economy should not be overlooked. Now that the PST-related tax burden has been removed, manufacturers will be in a better position to invest, grow and create jobs. The HST will also place Ontario manufacturers on an equal footing with other jurisdictions with similar tax policies – including five Canadian provinces and 130 countries worldwide – which will encourage more investment in the province. Economists estimate that Ontario will see $47 billion in increased capital investment as a result of the HST, as well as the creation of 590,000 new jobs.
As the voice of the chemistry sector, the third largest manufacturing sector in Ontario, the Chemistry Industry Association of Canada is one of a coalition of industry groups that strongly supports Ontario’s implementation of the HST. The Chemistry Industry Association of Canada looks forward to working with the Ontario government on future policies to further secure the viability and competitiveness of the province’s manufacturing sector.
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For more information please contact:
Michael Bourque
Vice-President, External Relations
Chemistry Industry Association of Canada
(613) 237-6215 x 225
Sarah Mayes
Manager, Public Affairs
Chemistry Industry Association of Canada
(613) 237-6215 x 239
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