HomeMy WebLinkAboutFIN-09-043 - GST PST HarmonizationREPORT
REPORT TO:
Councillor B. Vrbanovic, Chair, and Members of
the Finance and Corporate Services Committee
DATE OF MEETING: April 20, 2009
SUBMITTED BY:
Rosemary Upfold Director of Accounting
PREPARED BY:
Rosemary Upfold Director of Accounting
Brenda Johnson Manager of Accounting
WARD(S) INVOLVED:
All
DATE OF REPORT:
April 9, 2009
REPORT NO.:
FIN-09-043
SUBJECT: GST/PST HARMONIZATION
RECOMMENDATION:
For information
BACKGROUND:
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On March 26, 2009 the provincial budget announced the harmonization of the provincial sales
tax and the federal GST, merging the two into a single 13 per cent tax starting July 1, 2010.
This report and attached presentation provides a brief background on the harmonization, the
potential impacts to the City of Kitchener, as well as the City’s high-level plan of action to
implement the change.
REPORT:
The new harmonized sales tax will apply to a host of things that had not been taxed by Ontario
previously. They include gasoline, heating fuel, tobacco, fast food, gym memberships,
newspapers, magazines, haircuts, taxi fares, dry cleaning, legal fees, golf green fees, etc. In
addition, the government proposes that many necessities, such as children's clothing and
diapers, car seats for infants and toddlers and homes costing under $400,000 will be subject
only to the five per cent GST and not provincial sales tax. This change will impact the City and
its ratepayers/customers.
The attached PowerPoint presentation will provide an overview of some of the major impacts of
this change as well as the actions staff anticipate taking to implement the change.
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FINANCIAL IMPLICATIONS:
As the details of the sales tax harmonization are not finalized, it is too early to determine the
financial impact. A preliminary review would suggest that the City could see a nominal decrease
in costs. Further information will be provided to Council as it is available.
ACKNOWLEDGED BY:
Dan Chapman, General Manager of Financial Services and City
Treasurer
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