My guess is that the Harmonized Sales Tax is a necessary evil, but I still can loath it, and I have a specific area that upsets me to no end, and that is the HST has the potential to be a non-linear revenue growth in the area of Gasoline.
For those of you have not looked closely, the price of Gasoline is already highly influenced by the taxes put on by various levels of Government. The following graphic from the CAA outlines just how much we pay in taxes on Gas already:
These numbers are all approximate now, but given the HST now adds PST on top of these taxes it asks an interesting question, When is the HST/PST tax charged on the price?
From June 30th to July 1st in Ottawa gas prices went from 94 cents a litre to $1.02 cents a litre. That seems a bit of a large jump given my understanding is the 8% increase should have been on the CRUDE COSTS+Profit+Refining costs of Gasoline, not on top of the other taxes that are already in place, however, this does not seem to be the case.
As an example if Gasoline costs 43 cents before all of the added taxes, the HST should only add about 3.4 cents more to the price, but this does not seem to be what is happening. What seems to be happening (in my opinion) is that the HST/PST is being added ON TOP OF the other taxes on our gas. This means that the revenues from the HST/PST portion is from Taxes already charged?!?
This could mean that if the Federal Government increases their Transport Tax on Gas, or worse invokes a “User Tax” on Gas of 10 cents more a litre, does the new HST/PST grab another 8/10 of a cent from this increase? If so this is dirty pool on all levels of government, since they are Taxing, Taxes, and can increase their income by announcing only 1 tax increase when in fact there are TWO that come into play.
Anybody care to set me straight on how this should all work, please go ahead, I am willing to say I have got it wrong, but I don’t seem to be.