Stealth Taxing

by jakesylvester1 | July 10, 2010 at 03:45 pm

146 views | 0 Recommendations | 0 comments

July the first is our country of Canada’s national holiday/birthday party, once known as “Dominion Day”, now simply called “Canada Day”. However, for Ontarians, and those citizens in other provinces such as British Columbia, it gained the title of “Tax-Grab Day” as taxes were added on to, or increased on, various goods and services.

The much publicized “Harmonized Service Tax” became active on our holiday.

In general, an HST of 13% will apply to all goods and services currently subject to GST, and some purchases will likely cost more because some that were not subject to the PST will be subject to the 8% provincial portion of the HST for the first time. However, according to province, 83% of consumer expenditures will not see a new tax.

Funeral homes saw increased business in pre-paid plans which escaped the extra 8% tax. But, even gasoline, taxed heavily by both federal and provincial governments, was double taxed--the already taxed portion, hidden in the price, taxed once more.

While the public was contending with this issue, debating it around a sunset campfire in the Muskokas, or complaining while sitting on a Toronto balcony overlooking Lake Ontario, the provincial government taxed its citizens again, with little fanfare.

The levy for thousands of new products, from pharmaceuticals to fire extinguishers, quietly came into effect July 1, the same day as the harmonized sales tax. But unlike that tax, provincial agencies have done little to publicize the new fees, catching consumers . . . by surprise.

The Ontario government, through a program known as “The Municipal Hazardous and Special Waste Program” (MHSW), increased the number of types of products exposed to an environmental fee. Manufacturers and retailers can either absorb this fee, levy, or tax--all terms are used--into the cost of their product, or have it added on at the point of sale to be paid directly by the consumer.

Originally introduced in July 2008 on a limited number of environmentally hazardous materials, it went largely unnoticed. But the broadened base of products caught the attention of some astute customers and has spread like a Californian forest fire

In a sense it is a user fee to recycle materials which cannot be a regular part of a community or city’s green program. The MHSW, known in its publications as “The Orange Drop”, states that it is merely an environmental fee.

Orange Drop is here to help recycle the municipal household hazardous and special waste materials that we use and that need extra care when they’ve reached the end of their useful lives.Our aim at Stewardship Ontario is simple. We encourage you to live by the three Rs – Reduce, Reuse and Recycle and to use BUD guidelines for these types of materials: Buy only what you need, Use it all up, Dispose of the rest. Our Orange Drop program is designed to help you with the third R – recycling and disposal. We work to recover and recycle or dispose of your MHSW materials to ensure they don't end up dumped in landfills and poured down sewers and drains. And, so they don't end up sitting in our homes taking up space in our garages, basements and other storage areas.

Claiming that the program yields no authority over how the fees are paid, Orange Drop still sets price guidelines to follow for the freshly extended list of hazardous materials, at time of purchase, not recycling. This list includes some common items not considered all that hazardous:

--aerosol containers--whipped cream, sunblock, air freshener, cooking sprays, spray paint. Fee: Six cents for each aerosol unit (?)

--irritants and their containers-- laundry detergents. Fee: Twenty cents for every hundred litres.

--pharmaceuticals--prescriptions such as asthma inhalers. Fee: $7.76 for 1000 units, so less than one penny. Over-the-counter items such as liquid cough medicine. Fee: A penny a litre. Natural Health products--such as vitamin C dry tablets. Fee: Five cents per 1000 pills. And sharp items and syringes. Diabetic supplies such as 100 lancets used to draw blood to determine a blood sugar level. Fee: Sixty-nine cents a box.

While not expensive or extravagant considering the cost and how it will help the environment, one wonders how long these fees will remain at this level before an increase? That may be one concern consumers have, but right now, the spotlight is shining on the question: “Why did the provincial government do this in such a manner that it went unnoticed and was hidden behind the mass of publicity concerning the new Harmonization Service Tax?” Why a stealth tax?