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Ontario Announces New HST Exemptions

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Ontario Announces New HST Exemptions

Tax Reforms Would Create 591,000 Jobs And Cut Personal Income Taxes

Ministry of Finance

Ontario has announced additional point-of-sale exemptions for the provincial component of the proposed Harmonized Sales Tax (HST) for qualifying prepared food and beverages sold for $4.00 or less and print newspapers.

Today's announcement comes one week after a report released by economist and tax expert Jack Mintz stated that the HST, together with other tax changes would create an estimated 591,000 net new jobs over ten years.

Other items, such as basic groceries, most health and education services, prescription drugs and childcare, would not be subject to the HST.

The HST is just one part of a comprehensive tax package that would also provide, over three years, $10.6 billion in direct payments and permanent tax relief for the people of Ontario.

As part of the proposed tax package, 93 per cent of Ontario taxpayers would get a personal income tax cut. And nearly 3 million low-income Ontario families would receive a new, permanent sales tax credit of up to $260 for each adult and child per year - one of the most generous in Canada.

Quick Facts

  • The comprehensive tax package would result in the removal of $4.5 billion a year in embedded sales taxes when fully phased in, and more than $2.4 billion a year in corporate income tax cuts.
  • Ontario would also provide one of the most generous new housing rebates of its kind in Canada - a rebate of 75 per cent of the provincial portion of the proposed HST on the first $400,000 of the purchase price of a new home. This would provide a rebate of up to $24,000 for new homes across all price ranges.
  • The 2009 Budget already proposed exemptions for books, children's clothing and footwear, children's diapers, children's car seats and car booster seats, and feminine hygiene products.
  • Qualifying prepared food and beverages that are ready for immediate consumption if the total price for all qualifying items purchased, excluding HST, is not more than $4.00. Qualifying items would include: food or beverages heated for consumption; salads; sandwiches and similar products; and platters of cheese, cold cuts, fruit or vegetables and other arrangements of prepared food.

Background Information

Additional Resources

Quotes

“Not applying the provincial portion of the HST to newspapers and qualifying prepared food and beverages sold for a total of $4 or less would save money for virtually all Ontarians on a daily basis. Today's announcement is about more than the price of your coffee and newspaper, it's about a much larger comprehensive tax package that would create jobs for Ontarians and boost our economy, as we come out of this global recession.”

Dwight Duncan

Minister of Finance

“Our tax changes are about helping Ontario families by creating jobs and putting more money in their pockets through tax breaks and credits. Millions of Ontarians who buy their morning coffee would benefit from today's announcement, but the greatest benefit to all Ontarians would be the additional jobs created as a result of our tax package.”

John Wilkinson

Minister of Revenue

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