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Ontario Announces Shift to Harmonized Sales Tax

March-27-2009

Lawyer Glenn Ernst
Area Tax

Summary

The 2009 Ontario Budget, tabled on March 26, sets out a proposal to harmonize Ontario’s provincial sales tax (“PST”) with the Federal goods and services tax (“GST”) effective July 1, 2010.  Ontario will become the fifth province to bring its sales tax in line with the GST (Newfoundland, New Brunswick, and Nova Scotia have harmonized sales taxes, while Québec’s provincial sales tax is parallel to the GST, but is separately administered).  Although the Budget indicates that the proposed shift to a single, federally administered, value-added sales tax remains “subject to the approval of the legislature”, it includes some details of the proposed scope of the new tax and provides incentives to “help Ontarians through the adjustment period”.

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