As we know, Ontarios planned harmonization of the Goods & Services Tax (GST) and Provincial Sales Tax (PST) extends the 8% PST to new consumption items (with some exemptions). Over a lifetime, the extra tax burden can add up. In the case of MERs on mutual funds alone, it could be as high as $25,000for some investors.
One small blessing is that the Harmonized Sales Tax (HST) wont be enacted until July 1, 2010. You can imagine all the home renovation jobs that will be brought forward and completed beforehand (and the boost to underground renovation services afterward).
As well, its not hard to picture a boomlet in demand for new houses over $400,000 as buyers rush to beat the 8% to be imposed in mid-2010. If you just bought your McMansion in an unfinished housing project, give thanks to the Ontario Government for helping to fill up those empty lots and boost the value of your dwelling by 8%.
The new taxes may also stimulate purchases of all houses somewhat, regardless of age or price. Buying before the tax is levied will save a few thousand in HST on the closing costsassociated with purchases of new/resale houses (e.g. legal fees, moving bills, real-estate commissions).
As an aside, we may observe that the HST, in bestowing the incentive to renovate and buy before the implementation date, would appear to be, strangely enough, stimulative of the economy in the short-term. That raises an interesting notion for getting the economy back on track: instead of spending billions on bridges and new city halls, politicians should announce substantial increases in the GST and other taxes on consumer items effective some date 18 months hence (but secretly plan, for the sake of their own re-election and the relief of all, to cancel the increase before imposition).