Hudak, Horwath take HST fight to municipal leaders

Derek Puddicombe
London Free Press

OTTAWA – The provincial government’s proposal for a harmonized sales tax will add unwanted financial pressure to municipal government budgets, say the leaders of Ontario’s two main opposition parties.

Conservative Party leader Tim Hudak and Andrea Horwath of the New Democratic Party both told delegates at the Association of Municipalities of Ontario Conference in Ottawa today that the HST has to be stopped.

“It’s a sweeping multi-billion-dollar tax grab in the grip of a recession,” said Hudak. “It’s just an unfair burden.”

In a speech before hundreds of municipal politicians at the Westin Hotel Tuesday morning, Hudak warned cities and towns that they had better proceed with major purchases now before being hit with the tax.

“It’s hardly realistic for cash-strapped municipalities,” said Hudak. “It will drain municipal coffers.”

Horwath also blasted Premier Dalton McGuinty’s proposed HST.

“Instead of big spending on tax overhaul the McGuinty Liberals could be investing in municipal priorities like speeding up the municipal service upload, repair roads and bridges or assume a greater role in transit cost,” said Horwath. “The McGuinty Liberals have their priorities all wrong.”

McGuinty is proposing the 13% HST to be introduced sometime next year. The Liberals say it will increase the sales tax on some things that right now are only taxed at 5%. However the government says that along with the harmonized tax Ontario residents will see the largest income tax cuts in decades. McGuinty, who will speak at the conference later today, said the HST is the will ake the province’s economy more competitive.

Ottawa city councillor Peter Hume, the president of AMO, hasn’t been briefed on the finer details of the proposed tax and said he wasn’t clear on the impact the tax will have on municipalities.

“But we certainly are looking to ensure that whatever it i,s is revenue neutral to municipalities,” he said.

Bay Coun. Alex Cullen said municipalities are supposed to receive a rebate on every penny of HST paid to the province, which will mean no impact on the city.

“We are being drawn into the controversy and it has to have no net impact on taxpayers,” said Cullen. “He (McGuinty) is saying municipalities are exempt. We have to hold him to his word.”