Thursday, July 1, 2010

Panic in the Streets!

This was the scene at my local gas station at 11:30 PM, Wednesday July 30th. On a normal Wednesday evening, it would be unusual to have more than two or three cars total at the eight available pumps at any one time. Tonight, with one pump mysteriously blocked off, there were often several drivers waiting for a vacancy.

Just half an hour before taking this photo, I waited in a line-up three deep for my turn at the pumps. When I had first passed by, at around 6:00 in the evening, the lines were overflowing out of the station onto the surrounding streets.

Why the sudden rush? It's because at midnight, the new Harmonized Sales Tax comes into effect. Yes, as of July 1st, sales tax on fuel goes from the current 5% GST to 13% as the previous 8% PST gets added in - and it should be noted that like the existing tax, it compounds on taxes built in to the price of fuel already, meaning it's partially a tax on a tax.

It's appropriate that the addition of the HST (to this and a number of other items, though not everything) occurs on Canada Day, as taxing citizens in new and creative ways appears to be a Canadian tradition. Remember, Income Tax was strictly a wartime measure when it was introduced - back in 1917!

Topping the family's two cars at the current 96.4¢ per litre cost me $40 even (call it $38 pre-GST). With the new HST, the same amount of fuel would have cost me $42.94. Does an extra $3 really matter in the grand scheme of things?

Look at it this way: That same $40 would have bought me 8% less fuel. Whether you figure it by the litre or lifetime of driving, my fuel dollar now takes me 8% less distance, so it effectively costs me 8% more to get anywhere.

Think of how much this one item alone will add to the provincial coffers and it's not hard to see why they've done it. I hope that Premier McGuinty and his Liberal government have enjoyed their stay in office, because I can see the HST being political suicide.