Retail Council of Canada (RCC) applauds the Ontario Government for taking the bold step in today's budget announcement to harmonize the provincial sales tax (PST) with the federal Goods and Services tax (GST). RCC believes that tax harmonization will decrease the administrative burden on retailers, allowing them to be more competitive.
"Harmonization will result in a simpler and more efficient tax system for Ontario businesses," said Gary Rygus, Director of Government Relations, Retail Council of Canada. "This will help small retailers in particular, who find administering two separate tax systems difficult and costly."
Retail Council of Canada is also encouraged that the government has used offsets to reduce the burden on consumers by introducing a sales tax credit and base exemptions - in particular those relating to children's clothing, books and others.
"It is crucial for retailers that they continue to have the freedom to show the tax at the point of sale," Rygus added. "This will allow Ontario retailers to remain price-competitive with their counterparts in Manitoba, Quebec, the United States and elsewhere. We will be working with the Ontario and Federal governments to ensure this happens."
For many years, Ontario has had a spending problem, not a revenue problem, and this budget does nothing to counter this trend.
The provincial labour minister's recent wrong-headed decisions have also contradicted the government's overall claim that it is "Open for Business." For instance, the budget confirmed that the government is moving ahead with minimum wage increases, which will be particularly negative in the current economic climate. And the plan to proceed with mandatory WSIB coverage for owners of construction companies is nothing more than an annual 500 million dollar tax grab.
So, although the tax and regulatory burden reductions will be well received by Ontario SMEs, many negative factors still remain in Ontario's approach to the sector that provides the jobs and wealth creation in difficult times.
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