Photograph by: Chris Wattie, Reuters

Our Finance Minister, Jim Flaherty, who claims he’s finally going to end the flood of spending he’s been engaged in for four long years, is concerned about our hot real estate market. Looks like that stimulus worked too well, and Mr.Flaherty is concerned he’ll have to impose measures to make it more difficult for Canadians to get a mortgage.

“If we see further evidence that there is excessive demand in the housing market or that there’s an indication that people are taking on obligations that they will not be able to handle in the future when interest rates rise, then we will take some action,” Flaherty told CTV.

But is it the government’s business to decide whether people are able to handle their mortgage or rising interest rates? Isn’t that the job of the mortgage underwriters? Canada doesn’t have a history of governmental interference in the mortgage market or the subprime mortgage meltdown that occurred in the United States, which is why our housing market didn’t collapse nearly as much as the American one.

It also seems a little contradictory to the aims of the Conservative government to at once spur on growth, development, and economic recovery, while at the same time thinking about throwing water on the fire. Increasing the minimum size of the downpayment or the reducing amortization should be the decision of the banking institution, not the government. Shouldn’t it? I mean, if the bank winds up making bad loans, that’s their problem, not the taxpayers of Canada.

Making it more difficult to buy a home will seriously frustrate British Columbians as well, particularly those working in construction and real estate, who believe that Jim Flaherty’s HST is already going to be a crippling blow to one knee.

Both construction and real estate has been hard hit from the recession in B.C., and government changes to mortgages would soften the market and curb new building. It’s a critical time for the construction industry, which has laid off 44,000 workers since the end of the boom in September of 2008. The most recent statistics show that employment in construction hasn’t been this low in more than two years dating back to 2006, with March of this past year being an exception.

Add to this the HST that will come into effect next July on homes worth at least $525,000, and high interest rates, high initial deposits, and shorter amortization could create strong buyer resistance. And that means strong unemployment, created by the government itself.

HST Applied to Home Purchases beginning July 1, 2010

Estimates on the cost of the provincial portion of the HST varies but it’s expected to be several thousand dollars. Sales of resale or new homes are critical to Ontario’s economic recovery so this tax is seen as predatory and negative.

Pauline Aunger, President of the Ontario Real Estate Association says “”These additional taxes could price some homebuyers, especially first-time homebuyers, right out of the market,” and “Harmonizing will not help homebuyers in any way.” First time homebuyers will be certainly investigating first time homebuyer programs offered by governments and banks to keep their home ownership dream alive.

HST Rebate on Home Purchases

Fortunately, the Federal Goverment offers a rebate on the Federal portion of the HST. The HST program provides a rebate on part of the GST or the federal part of the HST paid on the construction or purchase of most newly constructed or substantially renovated houses used as a primary place of residence.

Do I have to pay Tax?

The Harmonized Sales Tax replaced the Federal Sales Tax in 1991.  Although tax is collected at a rate of 15% on the sale price of good and services, it doesn’t apply to every type of home or every type or real estate.

New Home purchases are subject to HST but may qualify for an HST rebate.  Resale homes are sold without HST.  Land may be exempt from tax, but realtors and other professionals must charge HST on the purchase price.  However, if the home ids going to be your primary place of residence, it may qualify for a partial HST rebate, depending on sale price.

You do not have to pay HST on the purchase price of a used residential home.  Revenue Canada defines “used residential property” to include a previously occupied house, condominium, summer cottage, vacation property or non-commercial hobby farm.

HST applies to most of the services provided in completing the real estate transaction.  For example, 15% HST is applied to the commission a realtor charges for facilitating a sale.  The tax is paid by the person responsible for paying the commission – generally the seller.  HST also applies to many of the other services involved in the real estate transaction, including appraisal feed, referrals, surveys and legal assistance.  HST is charge on these fees regardless of whether the house purchase is itself HST exempt or not.

One exception is that mortgage broker fees are HST exempt if the fees are charged separately from any taxable real estate commissions.  As well, mortgages and interest on mortgages are HST exempt.

HST is not normally due and payable when the real estate transaction is completed – generally the “closing date”.  In some cases, HST could be payable on transfer of possession.  Your realtor can answer your questions about closing dates and HST payments.  For additional information contact you local Revenue Canada Tax Services Office.

We’re counting the top ten stories of 2009! These stories were based on frequency of appearance in the media, user-activity (replies, page views etc.) from our own blog, and our own opinion of the importance of these stories.

We’re kicking it off with the HST at #10. BC and Ontario residents felt a little blind-sided by the introduction of this unpopular tax already implemented in certain locales across the country:

Top Stories 2009: #10 – The HST:

Thousands attend HST rallies in B.C.
From The Globe and Mail,  September 19

Former British Columbia premier Bill Vander Zalm jumped back into the political spotlight Saturday when he led the biggest of 20 provincewide rallies against the proposed harmonized sales tax.

Mr. Vander Zalm, 75, told more than 1,000 people gathered outside a downtown convention centre that the HST will deal a cruel blow to most people while boosting profits for big business.

“It takes from the people, the consumers, particularly those who are packing the lunch bucket, the seniors, the students, the people that can least afford to pay yet another tax and it’s giving it to the big corporations,” Mr. Vander Zalm told the rally.

Mr. Vander Zalm, who led the Social Credit party from 1986 to 1991, headlined the anti-HST rally in Vancouver and said 19 other communities from Prince George to Victoria were also waging an attack on the tax that the Liberal government will implement next July.

In Vancouver, small business owners and families made up the crowd, many carrying signs including “Don’t bleed us dry;” “More taxes, more lies;” and “Fight the HST.”

Mr. Vander Zalm told them they have the power to stop the 12-per-cent HST by putting pressure on Premier Gordon Campbell’s Liberal government, which maintains the tax is being unfairly slammed.

Mr. Vander Zalm said he hopes public outrage will lead to a referendum if 10 per cent of voters in each constituency oppose the HST, which is also being implemented in Ontario next July, but at 13 per cent.

“We’ll do whatever it takes and we’ll go from now until election time so that the people won’t forget,” he said to cheers.

The charismatic Mr. Vander Zalm resigned as premier in 1991 when a provincial conflict-of-interest report found he had mixed private business with his public office in the sale of his Fantasy Gardens flower business and theme park.

He has only occasionally commented publicly on issues since then, but Saturday’s rally was perhaps his most high-profile appearance in nearly 20 years.

Opposition NDP Leader Carole James joined Mr. Vander Zalm and leaders of smaller political parties to say halting the HST will take people from all political stripes to stand together.

Ms. James said the Liberals introduced the HST after saying that wouldn’t happen and then failed to consult voters.

“The public is angry at being betrayed by this government and I have to tell you it shows how angry people are when you can get political opponents together,” Ms. James said, adding she and Mr. Vander Zalm have been on opposite sides on many issues over the years.

Ms. James said the vitriol against the HST could eventually force the government to bow to public pressure.

“It will take seven Liberal MLAs to vote against the HST,” she said. “So I encourage you to get out there. Phone your Liberal MLAs, talk to them, write to them. Tell them to do the right thing.”

(ScienceDaily) – … The massive, young stellar grouping, called R136, is only a few million years old and resides in the 30 Doradus Nebula, a turbulent star-birth region in the Large Magellanic Cloud …

http://www.sciencedaily.com/releases/2009/12/091218132035.htm

Earlier this week, a news story made the rounds making the somewhat tongue-in-cheek claim that the Hubble Space Telescope had imaged a “cosmic Christmas ornament” in the sky.  Here’s the image…

The article then goes on to state:

The Hubble Space Telescope has captured a festive view of the cosmos in time for the holiday season, with some saying the picture of a star nursery looks like a wreath, maybe a Christmas tree, or even Santa.

The spacecraft observed a group of young stars called R136, which is only a few million years old and inhabits the 30 Doradus Nebula, part of a relatively nearby satellite galaxy of our Milky Way called the Large Magellanic Cloud.

In the photograph, hundreds of brilliant blue stars are surrounded by a ring of warm, glowing orange clouds of dust. The colorful portrait evokes a giant wreath of pine boughs studded with glowing jewels — sort of. And in the hollow center, the dark shadow has the distinct silhouette of a Christmas tree. Really!

Finally, if flipped 90 degrees clockwise, the image even resembles the face and beard of Santa Claus himself. Somewhat.

Well, whether or not this heavenly view actually has anything to do with the season on Earth, it does teach scientists about what’s happening up above.

This humorous story does a good job of hitting upon the point I wanted to make: what you see in such images, whether they are of “Santa” in a cosmic nebulae in the sky or “Jesus” in a rusty clothing-iron, is the result of a well-known phenomenon called pareidolia. We see familiar patterns because we are trained, by both evolution & our upbringing, to see familiar images even when there’s nothing more than random noise present.

In short, pareidolia is in your head, and different people “see” different things.  More than anything, pareidolia tells us a lot about ourselves and what we’re thinking rather than what we believe we’re looking at.

I’m sure you’ve heardby now unless you’re living in a bubble (no, not the Real Estate Bubble – that’s another story!), the provincial government has announced that it intends to combine the eight percent Provincial Sales Tax with the five percent federal Goods and Services Tax, creating a 13%  Harmonized Sales Tax (HST).

Recently, I’ve had an increasing number or clients and buyers asking questions about the HST and how it will affect their real estate situations.  Some people have accepted it, others have been quite upset and said they will not buy real estate if there’s going to be HST applicable on it. 

As with all changes to legislation, there’s potential for confusion.  I thought it timely to give some basic background on how the new HST will affect you if you’re thinking of buying a new home or condo once the HST has taken affect.

And here it is:

• The HST is NOT YET IN EFFECT. The provincial government has indicated that it intends to bring the HST into effect beginning on July 1, 2010; however, note transition rules below;
• HST will not apply on the purchase price of re-sale homes.;HST would apply to services such as moving cost, legal fees, home inspection fees, and REALTOR® commissions;
• HST will apply to the purchase price of newly constructed homes. However, the Province is proposing a rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000. For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.

If you’re wanting to discuss how the HST will affect you, please feel free to contact me either by email or phone at (905) 507-0040 ext.22.  I’d be happy to discuss your real estate needs.

Ryan

(Mail Online) – It looks like a beautiful watercolour painting, but this picture reveals a collection of 30 baby solar systems bursting into life in the Orion Nebula. …

http://www.dailymail.co.uk/sciencetech/article-1236095/A-star-born-Hubble-captures-baby-solar-systems-emerging-stellar-womb.html

http://www.spacetelescope.org/

It seems that the government has decided that it is no-longer accountable to Canadian citizens. Despite the fact that over 70% of Ontario and B.C. residence are against the HST, the government has a full-steam-ahead policy, and is in the process of passing the HST. I had the opportunity to speak to my local MPP’s (Ted McMeekin, as well as Sophie Aggelonitis) about the HST, and they informed me that their government was willing to make the “hard choices” for the good of the country, despite the many criticisms that they were receiving. Apparently, according to Mr. McMeekin, to be a true leader you must be willing to do what people are against. Uhh…news flash Mr. McMeekin-you are elected by the people. You are not, nor is Mr. Harper, our “little Papa” as the Russians call their leaders. In this country, we expect our government to react to what it is that we desire. I will admit that there are times when the government must make hard decisions and go against the majority, but that is only in the defence of the minority. And, although I suppose it could be argued that rich businessmen are a minority, I don’t think that it’s quite the same.

The HST is supposed to help business in Canada, and as a result make Canada more competitive. This is true-it will likely do just that. However, at what cost? The truth is that this bill is specifically designed to help the big guy at the cost of the little guy. Consumers are going to be hit hard by this, despite what the government claims. Our dear friend Ted McMeekin claimed that most consumers would not be hurt by the tax in any way-I get the feeling he hasn’t looked at it very closely. The tax will increase on natural gas (what we heat our homes with), as well as fuel for cars, and many other essentials. Now-could someone please explain to me how this tax is not going to hurt the average consumer? My parents do not own a business, but they do own a house and a car.

In the end, the question is this-are we willing make the gap between the middle and higher classes, and the low and higher classes larger, simply to make Canada more competitive? I truly hope that Canada is not entirely lost in that we are entirely devoted to trying to become more successful economically. I would rather see a whole lot of Canadians with some money in their pockets, then a couple more rich businessmen, but a great deal less Canadians who can survive with kids on one income.

Federal government readies HST bill

The Ontario Government recently enacted legislation which will implement the much-dreaded HST Tax. This new tax will take effect on July 1, 2010.

The HST tax will effectively combine the Provincial Sales Tax of 8% percent with the Federal GST Tax of 5% percent, to create a new “harmonized” total tax of 13% percent. This new tax will be applicable to many real estate services which hitherto only had one or the other tax applied.

The HST will result in a 13% tax on new home construction, but my post today will concern those ancillary costs pertaining to the buying and selling of resale residential real estate properties in Ontario… 

First, the good news….there is no HST tax payable on the sale of a resale home (residential). So the single largest dollar amount exchanged is not taxable under HST.

However, under the harmonized sales tax (HST), home buyers and sellers will have to pay extra tax on a range of services associated with the real estate transaction: services such as legal fees, moving costs, real estate commissions and home inspection fees. Currently, consumers only pay the 5% Goods and Services Tax (GST) on these services. 

In a nutshell, after July 1, 2010, if you are a seller, there will be a 13% percent tax payable on the real estate commission you pay – currently there is only the 5% percent GST payable on this fee. Your lawyer’s fee will also be subject to the 13% percent HST, as will the cost of a Condominium Status Certificate.

If you are a buyer, any Home Inspection you pay for will be subject to the 13% percent HST. And so will the cost of movers hired. In addition, the cost of the CMHC premium for “high-ratio” mortgages has traditionally been taxable for PST – this amount will now be taxable for the full 13% percent HST.

So one can see that, with the introduction of the HST, whether you are buying or selling a Resale Home in Ontario, costs will be going up.
A press release from the Ontario Real Estate Association earlier this year summarized some of these changes which will take place – the example that they used was for a resale house priced at $360,000, and it was determined that the HST would add over two thousand dollars in new taxes to closing costs. Please note, these taxes are in addition to the Land Transfer Taxes which exist for both the Province and the City of Toronto. OREA calculated that, in total, the HST would add $313 million annually in new taxes to resale home transactions.

CURRENT TAXES PAID, VERSUS THE NEW COMBINED HST TAX PAYABLE, ON A HYPOTHETICAL $360,000 REAL ESTATE TRANSACTION:

    ————————————————————————-
                        Table 1: HST and Resale Homes
    ————————————————————————-
                                      Current Tax                           HST Tax
    Taxable Service            Payable          New Taxes          Payable
    ————————————————————————-
    Mortgage Insurance
     Premiums(1)               $752.40        $470.25(2)        $1222.65
    ————————————————————————-
    Legal Costs                  $50.00            $80.00           $130.00
    ————————————————————————-
    Real Estate
     Fee/Commission          $720.00-        $1,152.00-      $1,872.00-
                                      $1,080.00       $1,728.00       $2,808.00(3)
    ————————————————————————-
    Home Inspection            $20.00            $32.00          $52.00
    ————————————————————————-
    Title Insurance               $24.00            $15.00          $39.00
    ————————————————————————-
    Total New Tax:                        

                                                              $1,749.25- $2,325.25
    ————————————————————————-

1) CMHC premium of 2.75% for mortgage with a 5% down payment on a
        $300,000+ home.
    (2) Consumers currently pay the 8% PST on mortgage insurance premiums.
    (3) Real estate commissions are negotiable or may be a flat fee.
        Estimated range of 4% to 6% used.
    (4) Ministry of Finance, Public Accounts, 2007/2008.
    (5) Altus Group, “Economic Impact of MLS(R) Home Sales,” June 12, 2007.

The HST Ontario Tax will add to the cost of buying and selling a resale home. Many market watchers are predicting a flurry of activity leading up to the July 1, 2010 implementation date, as buyers and sellers both try to avoid paying the tax.

Photo by Bruce Stotesbury/ Victoria Times Colonist

“MPs are forced to do the bidding of the party over the bidding of the people. It breaks my heart.”

Yesterday I spoke about Dona Cadman, Conservative MP for Surrey-North, who skipped out on the HST vote in the House of Commons because she believes it isn’t good for the province or her constituents. She was understandably “whipped” by Gordon O’Connor for her actions, since after all, the Conservative government is the one who brought about the Harmonized Sales Tax in the first place.

But I lamented the fact that the House of Commons is nothing more than a democracy going through the motions. There is no genuine regional representation, since the party enforces discipline and “whips” the vote so that many Members of Parliament need to choose between the party and their constituents. Principled politicians, of whom there are a conspicuous dearth, like Bill Casey of Cumberland-Colchester-Musquodoboit Valley, was kicked out of the Conservative Party for choosing the Atlantic Accord over the bully tactics of the Party.

Keith Martin, MP for Esquimalt-Juan de Fuca, is a politician whom I’ve admired in the past. He led the attack on Section 13.1 of the Human Rights Act which restricts speech on the internet, even though most of the Liberals in his party didn’t agree. I’m not sure how he personally feels about his Party calling the current government the “Reform-Conservatives”, since Mr.Martin is himself a former Reformer. Unlike many Reformers, he was always a social liberal and a fiscal conservative.

Like Dona Cadman, Mr.Martin skipped the vote in the House of Commons because his vote was “whipped” by the Liberals. That’s right, whipped. The same party which was hemming and hawing over the tax, calling it the “Harper Sales Tax”, and threatening to bring down the government, finally capitulated on the issue when they found out the Bloc Quebecois would be supporting it, and decided to get on board.

This has led Keith Martin to describe our democracy as a “warped, twisted and undemocratic” place where MPs act like lemmings who are forced to act as their party dictates. Apparently he tried to convince Michael Ignatieff to oppose the tax, and when he lost that battle he refused to show up and join his fellow lemmings.

“It was a whipped vote, but I said I could not vote for it and I wasn’t going to show up.”

As Michael Smyth reports in the Province, Keith Martin couldn’t show up and vote against because it would have come with repercussions. Voting against your party leader can lead to ostracization, and your power and influence becomes eroded by the party elite. This, he says, is what is toxic about our current system.

In politics I suppose you have to pick and choose your battles. Would it have been wiser for Keith Martin to pick the HST as his hill to die on out of principle? Perhaps. Although once the party kicks you out, removes the branding power behind your name, and enters in a new candidate, it can be difficult to run for reelection as an independent. Bill Casey did it, and won, but at a cost. His power is extremely limited as an independent.

The message being sent to Canadians is that when you vote for a regional candidate, you may not be voting for your regional interests. You may be voting for Ottawa’s.

Hi everyone,

As I’m sure you know by now, the House of Commons voted overwhelmingly in favour of the new Harmonized Sales Tax (HST) for both Ontario and British Columbia.  For those who might not know, the HST is a blending of Ontario’s 8% provincial sales tax and 5% federal GST.  This new tax will kick in starting on July 1st, 2010.

As it relates to Ontario Real Estate, almost all residential real estate transactions in Ontario will be taxed at the new HST rate  of 13% (instead of the usual 5% GST).  Home buyers and sellers can expect to pay an additional 8% on legal fees, appraisals, home inspections, real estate commissions, moving costs and the  upcoming mandatory home energy audits.

The Ontario Real Estate Association (OREA) estimates the average residential real estate transaction will cost the consumer an additional $1,500 as of July 1st, 2010.  By following this link, you can express your concern to your local MPP. http://bit.ly/stopthehst

If you are thinking of selling your home in 2010, it might be a good idea to get the ball rolling to ensure you have it listed and sold prior to July 1st.  It’s also a good idea to keep in mind that many other people will be doing the same thing.  Right now, listings are low which is why you’re hearing so much about “multiple offers”.  Once the influx of new listings begins in early 2010, it is estimated that there will be a drop-off in the number of “multiple offers” out there.  This is good for the buyer, but not as desirable if you are the seller.  If selling in 2010 is in your plans already, it would benefit you to list sooner rather than later in my opinion.

If you would like more information on the HST or buying/selling a home, please leave a comment at the end of this post or contact me at the phone/email below.

Putting You First,

Jason Watkins
jasonwatkins@royallepage.ca
416-690-2182

Both the federal and provincial governments, this week, passed legislation that will bring the Harmonized Sales Tax (HST) to Ontario.

This isn’t news, of course. Much has been made of the tax by opposition parties, the government, and everyone with an email address book and in receipt of chain mail characterized by the liberal use of capital letters.

Still, the debate swirls around jobs, the economy, and the added costs to consumers. The government, supported by various business groups, say the HST will lower business costs and increase employment (the federal government, supported by the same business groups, said the same thing about the GST with which the PST is being harmonized). The opposition, supported by social groups, say the HST will hurt vulnerable people. They said the same thing about the GST.

Indeed, as the provincial government makes clear, the introduction of the HST will be met with permanent income tax cuts for businesses. This is a double-bonus for the corporate community. First, businesses will now get rebated for HST expenses, as they are with GST, but they will also see their income tax burden reduced to ten per-cent from twelve while the small business rate is reduced, as well.

The government says that individual tax rates will be reduced also, when or how much is rather vague, but there will also be three one time payouts for families and individuals.

However, families and individuals will now be paying eight per cent more for almost everything and especially utilities including telephone, television, electricity, heating fuels, transportation fuels, and professional services including insurance or the labour of a mechanic or plumber.

Very conservatively, a family of two will pay $1,000 or more every year in taxes. That’s quite the hike.

There are several things about this tax not discussed in the debates that have surrounded it.

1) The HST represents a further shift of the tax burden from corporations to families. The defenders of the shift argue businesses will invest in new equipment creating new jobs and tax savings will be passed on to consumers.

Despite all the talk of jobs being created, there is no discussion at all as to what jobs will be created and for what workers. Surely if it can be said there will be a half million jobs created it must be possible to say in what industries and in what capacity. Simple economics suggests businesses will not invest in new equipment if there is not the demand to meet the increased capacity.

The GST was introduced in Canada in 1991. In 1992 Canada was in recession upon which we were introduced to the jobless recovery, the export of manufacturing jobs to free trade zones and eventually China, and the ascendancy of low wage retail as Canada’s largest sectoral employer. The savings in goods materialized not in price reductions by manufacturers but in the export of production to low wage economies.

The record of the consumption tax in Canada is not one of which to be envious.

2) The tax is regressive. This is a term that is used a lot when discussing taxes but one that is rarely detailed. It works like this: Granny lives on a pension of $2,000 per month. Reginald Marshall earns $10,000 a month in his job as a mid-level bank manager. Both live in modest homes and live modest lifestyles. As a result, they each will pay $120 per month in taxes more as a result of the HST. That covers home heating, electricity, water, fuel, telephone, cable, insurance, and Internet, and other services.

For Granny the $120 represents six per cent of her fixed monthly income. For Reginald it is only  1.2 per cent and he can earn employer bonuses. It is much more likely Granny will have have to give up something of value than will Reginald. And for those on the economic margins the tax may represent lost meals or even homelessness.

Some have said the tax is a carbon tax as it is applied against energy. But again, it is a regressive tax in that it is applied equally whether one barely scrapes by or if one is a Bay Street CEO. You pay the same whether you drive an Echo or a Hummer. Yes, the Hummer driver will pay more by virtue of quantity purchased but a progressive carbon tax is much more likely to act as a disincentive to owning a Hummer in the first place.

3) It is the wrong tax at the wrong time.  The consumption tax is central to a service economy based not on the production of goods for domestic and some foreign consumption but on the retail sale of products produced abroad and imported for retail sale.

That economy is coming to a close. The proponents of globalization, including most of our politicians and  corporate opinion makers, would disagree. They would argue the financial crisis represented a set-back to the global economy but Prime Minister Stephen Harper’s recent trip Asia to hawk Canadian resources and energy proves the global economy remains very important to Canada’s and Ontario’s future.

Indeed, Ontario’s economy has been fueled over the past thirty years by the twin drivers of homes and autos. This is evidenced by the success of huge retailers such as Wal-Mart, Canada Tire, Home Depot, etc … that outfit our homes and maintain and personalize our vehicles.

But all of this has been premised on a global trade of cheap goods produced with cheap labour and transported on a flow of cheap energy (and we’re not mentioning personal debt). Energy is the achilles heel of both globalization and the era of cheap. Energy will cost us all more either due to scarcity or introduced carbon costs in compliance of efforts to reduce green house gas (GHG) emissions.

A tax aimed at skimming off the top of a retail service economy will act as a drag on the return to local and regional productive economies. The transition will not be led by large corporations and retailers, but by small businesses, farmers, and individuals at kitchen tables.

Further, governments dependent on consumption taxes will see their revenues decline along with the fleets of container ships plying the oceans from China to the west coast to unload a sea of plastic into the big boxes that now define the Canadian urban experience.

Income taxes can be fair, shared equitably and fund the transition from a global economy awash in cheap energy to local economies in a new era of energy scarcity. A consumption tax ensures governments are as poor as their  subjects in a contracting global economy and, as a consequence, unable to act quickly and with purpose in building upon the ruins of what’s fallen down.

“I vote with the people or for the people.” – Dona Cadman

According to North Surrey MP Dona Cadman [widow of former Conservative Chuck Cadman], she was “reprimanded” by the Conservative whip, Gordon O’Connor, for speaking out against the HST. Ms.Cadman said she would not vote for the motion enabling passage of the harmonizing tax legislation with the provinces of B.C. and Ontario, and when the vote came she kept her word. Her seat was absent in the House of Commons.

Since the Bloc Quebecois and Liberals supported the government, it passed easily by a score of 253-37. I’m not sure how Dona Cadman’s extra vote would have mattered.

For the party whip, here’s something you might not understand: it’s called holding to your principles and acting in the interests of your constituency. You might want to look into it some time. It has the tendency of gaining voter loyalty.

For anyone from the Conservative Party to reprimand Ms.Cadman over this incident is truly ridiculous, particularly as the ways and means motion wasn’t a confidence matter. And quite frankly, what is the point of a parliamentary democracy with regional representation, if some party hack in Ottawa gets to “whip” your vote for the betterment of the party?

Please. Spare me the talk about party discipline. Iran has good party “discipline”. I want a democracy.

And in our little democracy here, the HST is as popular in British Columbia as the bubonic plague. According to a recent poll by Innovative Research Group, 63% of the province “strongly disapprove” of it. It is the number one concern regarding the performance of the provincial government here, a government which is ramming home a tax on the people after just finishing an election in May which not only didn’t mention the tax, it explicitly stated it would not be looking into it.

If you think the HST won’t hurt the Conservative Party in B.C., think again. Only 35% of the population here were even aware that the HST was initiated by the feds, and when informed of that fact, 54% indicated they had a less favourable impression of the federal Conservatives. They might want to consider that before they go and reprimand Dona Cadman for representing her constituents.

The HST, due to be implemented in July 2010, will add 7% to items previously exempt from the PST, threatening to hurt the restaurant industry, homes, and landscaping. As many as 85% of respondents to polls in B.C. oppose the tax, making it even more unpopular than the carbon tax, which was also forced on B.C. without public consultation.

Although it would have been nice to see Dona Cadman actually vote for the people on this one, it’s nice to see that she wouldn’t be coerced into voting against them.

Yup, it’s still big news – even against climate change:

Large majority oppose HST, poll finds

More than 80 per cent of British Columbians are opposed to the impending harmonized sales tax and many of those believe it’s a tax grab that will ultimately hurt consumers, according to an Ipsos Reid poll commissioned by Canwest News Service and Global National.

The poll released yesterday shows 82 per cent of B.C. residents and 74 per cent of their Ontario counterparts oppose plans by the two provincial governments to impose the harmonized sales tax.

In both provinces the tax is to come into effect July 1, 2010.

“I’m not surprised (the findings) are as strong as they are, it is certainly the kind of deep anger I hear out there,” said provincial NDP Leader Carole James. “The public is united and is very clear that it doesn’t believe this is going to be good for the economy in B.C., it’s not going to be good for business, particularly small business and not good for the people in this province.”

According to the poll, 49 per cent of people in B.C. believe the new tax won’t help business, while 91 per cent say the HST will not benefit consumers.

James will join Ontario NDP Leader Andrea Horwath and federal NDP Leader Jack Layton at a press conference in Ottawa on Monday to speak against the tax.

She hopes it will have an effect in the House of Commons, which voted to approve a ways-and-means motion Thursday clearing the way for the HST.

That move allowed the federal government to introduce legislation to enable Ontario and B.C. to impose the tax.

“I believe it’s critical that all MPs understand how the people of B.C. feel about the HST, so I’m going to make sure they hear loud and clear the views of British Columbians,” said James.

The HST combines the five per cent goods and services tax and the seven per cent provincial sales tax.

In B.C., the HST would be 12 per cent, and apply to almost everything that’s now subject to the GST.

That means a higher tax for goods and services that were not previously subject to the PST, such as restaurant meals and mutual-fund fees.

But many businesses will be able to get an HST refund on materials used to produce a product.

The poll found only 11 per cent of B.C. residents support the initiative, and 90 per cent believe that the real beneficiaries of the tax will be the provincial and federal governments.

Ipsos Reid conducted online interviews with 1,049 adults from B.C. and 1,962 from Ontario.

The B.C. portion of the poll has a margin of error of 3.1 per cent 19 times out of 20.

B.C. Finance Minister Colin Hansen did not make himself available to discuss the poll results.

However, the B.C. government has consistently defended the HST, saying it will bring billions in costs savings to industries such as forestry and mining, improve the economy, increase competitiveness and ultimately provide the foundation for jobs.

But the Canadian Taxpayers Federation says few people are buying into that line of thinking.

“People in B.C. are outraged about the HST, and rightly so,” said the federation’s B.C. director Maureen Bader. “It represents a $2-billion tax-burden shift from business to consumers.

The Ipsos Reid poll comes after a poll conducted by the B.C. Restaurant and Foodservices Association released Thursday that showed 75 per cent of B.C. residents oppose the HST while 63 per cent strongly oppose it. The consistency in the results shows the province is united against the tax, said association president Ian Tostenson.

The $10-billion restaurant industry expects a $750-million hit annually with the introduction of the new tax.

James said she has not given up fighting the tax, and assuming it passes through the House of Commons, intends to focus on scuttling it in the B.C. legislature.

BREAKING NEWS

The controversial new HST bill has passed it’s third (and final) trial today at Queen’s Park.

“I think people understand in their heart of hearts that our world has changed and the old world is not coming back,” said the oddly prophetic Premier McGuinty to CBC news.
He neglected to mention the apparent apocalypse he’s planning for.

The HST, or Harmonized Sales Tax, means that the five per cent GST and eight per cent PST will be blended, adding one part of those taxes to things that might normally not be subject to the PST, like gas, home heating fuel and cable TV bills.

Maybe this means fewer people will choose to drive. Bright side, right?

The HST is already in place in other provinces like Nova Scotia.

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Photo Credit: Mathieu Belanger, Reuters

The Parliamentary ways-and-means motion on the harmonizing tax in British Columbia and Ontario which had previously been referred to as the “Harper Sales Tax” by Mr.Ignatieff, passed easily today, evoking memories of Stephane Dion and the days of Liberal hand-sitting. It wasn’t even close enough to give a false sense of hope, with the yeas prevailing 192-32. The Liberals completely and utterly capitulated, with those who bothered to show up throwing their support behind the Conservative government and ending the federal controversy on the tax.

All that’s left now is to assess just how further weakened Michael Ignatieff’s leadership is after having yet another sand castle get kicked into his face by Stephen Harper’s big blue machine. Time after time the Liberal leader has created a blockade, only to have to tear it down again after realizing it wasn’t going to work. The embarrassing “on probation” comment and the economic updates are gone, not even mentioned by the Liberals anymore. The panel on Employment Insurance was staggeringly useless and ultimately undermined by the Conservative government’s own extension of E.I. benefits. At this stage in the game it’s almost got to the point where you want to shout at the Liberal leader: “Stay down, Mikey, for the love of God, stay down!”

But, often to predictable disaster, Mr.Ignatieff won’t stay down for the count. His party continues to undergo rebuilding on the fly, which is almost like watching the Toronto Maple Leafs try to sign and dress fans during the hockey game. It’s painful to see Toronto aide after Toronto aide leave Ottawa, and head back to the big smoke utterly defeated. It’s got to be even more painful being an insider of this train wreck of a political party. Not only is this an organization that changes policy based on the time of day, it changes members just as frequently. At this point I’m surprised the HMS Tory doesn’t pull up on the side and offer to throw life jackets to the survivors.

Of course very few of the Liberals will come to their senses long enough to realize it’s time to pack their bags and head back to the drawing board. Smug arrogance in the face of utter defeat seems to be a prerequisite for a Liberal Member of Parliament. Well, at least for those in the caucus.

It wouldn’t be fair to condemn every Liberal. There are very clear and visible cracks in the walls, although perhaps the metaphor of a wall would be a little generous. BC MP Ujjal Dosanjh was one of four Liberals who were opposed to the HST, which is extremely unpopular in regional polls. Mr.Dosanjh had just sent out flyers in his riding condemning the HST when his boss decided to back the Tories.

And let’s be frank here. Michael Ignatieff didn’t have a choice on the matter. The vote was going to pass anyway with the assent of the Bloc Quebecois, who only want Quebec to get their “harmonization” money just like B.C. and Ontario. The Liberals voting for, against, or not at all, did not matter in the end.

But the optics of Mr.Ignatieff’s flip-flop could not be worse. If you don’t like what the Liberal leader is saying today, just wait until tomorrow. It sounds like a Conservative attack ad. It isn’t.

The HST has been a divisive, controversial, polarizing issue that has created the strangest alliances and just as strange enemies. Both the provincial Liberal governments of B.C. and Ontario support the HST with the federal Conservatives, while the federal Liberals did not. Just as bizarre, both provincial Conservative parties reject the HST, going against their federal cousins. This had created some friction between Ontario Premier Dalton McGuinty and Michael Ignatieff, since the Liberal leader had given confusing, contradictory, and non-committal answers about whether he supported the HST or not.

In the end, his thunder was stolen anyway. Just as the NDP saved the Conservatives from a vote of non-confidence in September when the Liberals were trying to force an election at the same time their poll numbers were plummeting off a cliff, this time the Liberals saw the writing on the wall and tried to save their skins. It’s too late for that. The opposition leader has proven himself ineffectual, indecisive, and ultimately a liability. The only question is whether it’s going to take a drubbing in the next election before he, like Stephane Dion before him, understands that.

The two Ontario members of provincial parliament who have been most vocal in their support for the raw milk cause — seem to be working together to create a highly visible form of protest against a broad sweeping new tax grab being orchestrated by both provincial and federal levels of government.

MPPs Randy Hillier and Bill Murdoch in the legislature. Photo Tanya Talaga, Record News

This is a tax grab that seems to be in danger of facing no serious political opposition, especially now that Michael Ignatieff, the federal opposition leader in Ottawa has just today thrown his party’s official support behind the new tax. This new “harmonized” sales tax is slated to replace the GST and PST and the big news is that it will be applied a much wider range of purchases. We at the Bovine don’t usually comment on wider political issues, but we found it interesting that these two “allies of raw milk” in government have both seen fit to engage in this act of civil disobedience in order to draw public attention to this new tax that seems to be in serious danger of being railroaded and rubber stamped into law without sufficient public input.

Here’s an excerpt from the story, as reported by Maria Babbage, for the Kitchener Waterloo Record:

“TORONTO — An Opposition protest over tax harmonization that’s created chaos in the Ontario legislature ended up derailing the daily question period in the chamber Tuesday.

Speaker Steve Peters announced his unusual move over the ear-splitting din of the Progressive Conservatives, who have staged a sit-in over the government’s refusal to hold provincewide public consultations on the tax change.

Conservative party mavericks Bill Murdoch (Bruce, Grey, Owen Sound) and Randy Hillier (Lanark, Frontenac, Lennox and Addington), who were banished Monday from the chamber, rejoined their caucus colleagues Tuesday after sleeping overnight in an adjoining lobby that contains couches and a bathroom.

Instead of taking their assigned seats in the backbenches, Hiller and Murdoch sat in the two front seats closest to Peters, where they led their colleagues in an unrelenting campaign to drown out debate by shouting and pounding their desks.

The conflict escalated as Peters tried to bring the unruly Tories under control by pausing the proceedings several times and refusing to recognize the votes of party members who weren’t sitting in their own seats.

That only seemed to egg on the Tories, who accused Peters of being “undemocratic” by not counting their votes.

The battle reached a climax when, despite repeated requests to return to their assigned seats during question period, Murdoch and Hillier refused to budge.

That prompted Peters to walk out, scuttling the only hour in the day where opposition parties are allowed to hold the government to account in the legislature.

“I am not prepared to continue with question period while these two members are occupying the front benches,” Peters said.

No resolution seemed to be in sight Tuesday despite several closed-door meetings with representatives from all three parties.

The Tories insist they won’t give up until they get at least one day of public hearings on the harmonized sales tax legislation outside Toronto, while the governing Liberals derided the antics as nothing more than playing for the cameras.

The two Tories can still be removed by force, but Peters said he was loath to take that unprecedented step.

The clearly uncomfortable Speaker said he allowed Murdoch and Hillier to sleep in the adjoining lobby overnight to avoid a repeat of Liberal Alvin Curling’s overnight sit-in in 1995, when the Conservatives were in power.

“I did not want to see issues in the chamber of somebody utilizing a bottle to deal with bodily, human functions,” Peters said.

The disruption isn’t slowing down debate, which means the Tories are wasting time while government legislation aimed at merging the eight per cent provincial sales tax and the five per cent federal GST continues to wind its way through the legislature, said government House leader Monique Smith.

They shot themselves in the foot again by tanking question period, which has alienated the NDP, their only potential allies in the HST battle, she said.

Smith said she tried to break the impasse Monday night with an offer to extend public hearings in Toronto from one day to 2 1/2 days, but the Tories never responded.

“Unfortunately, we have an Opposition that’s intransigent and we have an Opposition leader who’s unable to control at least two of his members,” she said.

“And by the actions in question period today, it might be even more than that.”

Government sources claim the Tories considered the offer, but Murdoch and Hillier — who are both notoriously difficult to control — vetoed it.

Conservative house leader Bob Runciman denied that Hillier and Murdoch have gone rogue.

“We’re very supportive of Bill and Randy and I think that once this thing is dealt with, I think that it’s not going to be a problem,” he said. “They’re not going to present a problem for the Speaker, they’re not going to present a problem for us. We remain fully supportive of what they’re doing.”…”

Read the whole story here on the Record.

Also see:

Randy Hillier’s private members bill on raw milk

Proposed new private members bill to legalize direct farm sales of raw milk

Four amigos at Queen’s Park

A brief history of raw milk in Ontario

Bill Murdoch also tabled a private members bill to study the question of raw milk, within a few months after the raid on Glencolton Farms in November 2006. However, as that was before the Bovine, we don’t have any stories on that episode in the raw milk drama.