# Canada GST to HST Ontario



## Bajak (Nov 12, 2008)

There is talk of Ontario introducing HST. I am just looking for insight on how this will affect our service industry here in Ontario. Will this mean we will be charging customers 13% HST instead of the current 5% GST ? Will we be able to re-coup some of that money at tax time as we can now with GST?

Any insight from members in other Provinces here that currently deal with HST ?

Opinions from Ontarians good or bad.


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## Triple L (Nov 1, 2005)

i dont know much, but i think this is the stupidest thing ever.... a $36 lawn cutting cost the customer about $38... now all suddon when they get the bill its gonna be almost $42 per cut... all they see is the bottom number...and even tho im only getting my $36 they now think there paying about $5 per cut more...Thats Nutz! Just more of a market for the lowballers that make under 30K that dont have to charge tax....


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## Kunker (Nov 26, 2008)

All I hear is that "the HST will be better for businesses", so I presume that the HST will work like the GST right now. Explaining it to clients is going to be fun...I wonder how many will expect an 8% cut in price?


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## Bajak (Nov 12, 2008)

From the GRC site

"Registrants collect the GST/HST on most of their sales and pay the GST/HST on most purchases they make to operate their business. They can claim a credit, called an input tax credit (ITC), to recover the GST/HST they paid or owe on the purchases they use in their commercial activities."

Will this mean a 13% ITC on purchases? That's not bad. 

On the other hand, the price of trucking will be up 8% which was the argument used against carbon tax.


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## cet (Oct 2, 2004)

This is going to drive the underground economy even more. The homeowner wanting snow and grass services will be even more willing to pay cash.


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## dellwas (Oct 16, 2005)

Yup, that's what I do here in Nova Scotia. I've got a GST tax number/business number. You have to be federally registered in order to claim an ITC. Feds send me the form Late November, early December. I put down total sales, GST collected, and purchases (ITC). Purchases have to fall into specific categories, not all purchases can be claimed. Basically, if you pay more out in GST for purchases than what you collect from sales, then you get a refund based on sales vs purchases. If your sales are higher then you deduct what you purchased and remit the difference. It's important to note that this is not done with your regular Income Tax form, it is seperate.

This might help explain it further:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/bspsbch/itc-cti/hwt/menu-eng.html



Bajak;773395 said:


> From the GRC site
> 
> "Registrants collect the GST/HST on most of their sales and pay the GST/HST on most purchases they make to operate their business. They can claim a credit, called an input tax credit (ITC), to recover the GST/HST they paid or owe on the purchases they use in their commercial activities."
> 
> ...


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## Bajak (Nov 12, 2008)

Dellwas
How did/do your customers take to being charged the extra tax?
Also, because of the extra percentage on ITC did you adjust your hourly rates a little lower or keep them the same?


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## dellwas (Oct 16, 2005)

It's nothing new for us in Nova Scotia, we've had the HST (Harmonized Sales Tax) for a long, long time,and NS is one of 3 provinces that do it, so my customers are used to it.

As far as rates, there are two ways you can do it legally under Federal rules. You can either break it down (cost + HST), or include it with the total cost (don't have to show it). If doing the latter you must indicate that HST is included on the invoice (I do it in great big red letters). You also have to include your GST number on the invoice. For a while I used to break it down, but now I include it in the cost, makes it a little easier at tax time

Here's another link from Canada Revenue Agency that explains the in's and out's of setting up a busines (Federal perspective) for anyone that's interested:

http://www.cra-arc.gc.ca/E/pub/tg/rc4070/README.html

QUOTE=Bajak;773428]Dellwas
How did/do your customers take to being charged the extra tax?
Also, because of the extra percentage on ITC did you adjust your hourly rates a little lower or keep them the same?[/QUOTE]


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## grandview (Oct 9, 2005)

Sorry for the hijack,but Canada is sounding more like New York everyday with all the taxes!


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## DeVries (Nov 27, 2007)

You got it wrong Grandview. We don't have a lot of taxes just one big one.LOL


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## Neige (Jan 29, 2008)

For commercial clients it wont make any difference. For your regular client,(home owner) just wait, they will be pissed. In Quebec we have been charging both taxes for a long time now. So a $300 drive goes up to $338.62 with the taxes. They have become used to it, they may not like it, but accept it. It hurt our business for the first few years. People have only so much disposable income. I am sure most of you increased your prices after last year. Now the cost just went up 8% for your clients with this new tax. They really don't care who's fault it is, they have to pay more. Now are you willing to add the cost of living to your price or just swallow it for a year or two. We finally increased our prices in the third year. We post the cost of the taxes in bold, so they see 38.62 of the price goes to the TAX MAN. What a hair brained scheme, the timing could not come at a worst time for you guys. I feel for ya


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## dellwas (Oct 16, 2005)

Don't know bout stateside, but income tax first reared it's ugly head to raise money for the war effort. Can't remember if it was the First, or Second World War. In any case, it's been with us ever since!



grandview;773444 said:


> Sorry for the hijack,but Canada is sounding more like New York everyday with all the taxes!


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## Bajak (Nov 12, 2008)

I quote some jobs including tax. I just accepted (verbally) to plow one of my current contracts for the same money next season. Thankfully that particular contract/quote didn't include tax. That situation may have brought about some unnecessary squabbling. 


> *Neige*
> They have become used to it, they may not like it, but accept it.


 That seems to be the Canadian way.


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## dellwas (Oct 16, 2005)

Ya, except for the lucky stiffs in Alberta, no provincial sales tax!



DeVries;773451 said:


> You got it wrong Grandview. We don't have a lot of taxes just one big one.LOL


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## grandview (Oct 9, 2005)

dellwas;773479 said:


> Don't know bout stateside, but income tax first reared it's ugly head to raise money for the war effort. Can't remember if it was the First, or Second World War. In any case, it's been with us ever since!


I believe it was the Indians wars when it first started.payup


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## Bajak (Nov 12, 2008)

grandview;773484 said:


> I believe it was the Indians wars when it first started.payup


You mean back when you could buy Manhattan Island for a fist full of beads? ussmileyflag


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## grandview (Oct 9, 2005)

Bajak;773486 said:


> You mean back when you could buy Manhattan Island for a fist full of beads? ussmileyflag


Yes. And the beads were made out of rubber and bounced!


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## DeVries (Nov 27, 2007)

grandview;773491 said:


> Yes. And the beads were made out of rubber and bounced!


Ha HA Ha nice it'll take a while to whip the grin off of my face


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## JD Dave (Mar 20, 2007)

DeVries;773501 said:


> Ha HA Ha nice it'll take a while to whip the grin off of my face


You might have more then that to wipe off if GV used the beads.


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## grandview (Oct 9, 2005)

JD Dave;773517 said:


> You might have more then that to wipe off if GV used the beads.


Holy **** JD! Oh wait,is that what your talking about?


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## BrianWillan (Feb 2, 2009)

According to the Ontario provincial budget details, the harmonization of the PST and GST doesn't take affect until July 2010. So the upcoming plowing season will be business as usual as far as sales taxes are concerned.

Cheers

Brian
Ontario, Canada


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## DeVries (Nov 27, 2007)

Hey great thanks Brian, I was wondering about that. For business owners the new tax is good cause we get all of the taxes back now. But for the homeowner nows not the time to introduce a tax like that.


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## Triple L (Nov 1, 2005)

Talk about a way to stimulate the econonmy............ All the corporations are gonna hold back on everything until next year now.... that way they get 8% back in return....


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## Bajak (Nov 12, 2008)

Triple L;773626 said:


> Talk about a way to stimulate the econonmy............ All the corporations are gonna hold back on everything until next year now.... that way they get 8% back in return....


I agree. I was pondering the idea of replacing my wifes truck as well as mine this year. Now I think I will only replace hers (20% business / 80% personal). Mine will do for now even though I could use a bigger truck (100% business)..

I think I will try to use this to my advantage. "If you can afford to do it now you might as well because come next July it'll cost you more." 
A comment like that just might sell even me on finishing up a few projects around my place.


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## ff1221 (Feb 17, 2008)

Bajak;773650 said:


> I agree. I was pondering the idea of replacing my wifes truck as well as mine this year. Now I think I will only replace hers (20% business / 80% personal). Mine will do for now even though I could use a bigger truck (100% business)..
> 
> I think I will try to use this to my advantage. "If you can afford to do it now you might as well because come next July it'll cost you more."
> A comment like that just might sell even me on finishing up a few projects around my place.


Sorry to get off topic Bajak, but when you're talking trucks, Pierson's, the chev dealer downtown just called me, they have a lease return Silverado, not sure what year, probably 06, 07, 3/4 ton 4x4 with 60k with a Duramax/Allison. Don't know the price, give them a call, I've given up on a new pick-up, now that I got the 5 ton.

Now to the topic, it's gonna be tough sell, adding the extra tax to all those driveway contracts, and eating for a year or two is tough also, especially after a year like this one, I guess any new customers are going to start paying the hike this year so I don't have to explain it next year.


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## Bajak (Nov 12, 2008)

ff1221, thanks for the info on the truck. I think I will hold off still for a while. Good call on the 5 ton though. There doesn't seem to be too many around here. I've been using tandems for mulch and stone, where a 5 ton would be all that I really needed. I'm still relatively new in business around here and haven't found my niche just yet. I will keep you in mind for a small dump truck rental for sure though. I know I could use one now and again but not enough to merit the purchase on my part.

As far as I can figure out on the subject of the HST, this area will likely benefit with all the agricultural businesses. As far a tourism, there is no difference for the most part for visitors, unless you are from outside of Canada and get the tax rebate. For myself, most of my work is as a sub contractor or commercial, not a whole lot of private jobs. I think it'll give me a little bit more cash flow at least until remittance time any way. I hire trucks quite a bit though out the year and have always paid them for their work in good time, usually before I even get paid for the job. Most of the trucks I've hired in the past have lowered their rates this year due to lower fuel prices and competition (some have stayed the same but were cheaper to start with). I think if I'm not greedy and use my discount wisely this summer to benefit private customers, the transition should be relatively easy leading up to next July. As for the winter, everyone I have talked too is going to keep a premium rate for the nasty season no matter what. That is the consensus so far.


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