The Canadian Press

Buying a morning coffee or a newspaper won’t cost an extra 8% when Ontario merges its provincial sales tax with the federal GST next July, Finance Minister Dwight Duncan announced Thursday.

Printed newspapers and certain prepared foods and beverages sold for less than $4 have been added to a list of exemptions from tax harmonization, Duncan said.

“But it’s important for Ontarians to know that today’s announcement is about far more than not raising coffee prices,” he said at a Tim Hortons outlet in west Toronto.

“It’s part of a much larger, comprehensive tax package that will create jobs.”

Books, children’s clothing and footwear, diapers, car and booster seats and feminine hygiene products will also be exempt from Ontario’s 8% portion of the blended sales tax when it takes effect next July.
By keeping newspapers and cheap food and drinks off the list, the government is giving up $325 million a year that it otherwise would have collected as revenue, Duncan said.

Ontario is getting $4.3 billion over two years from Ottawa to move ahead with tax harmonization under a deal signed last March. British Columbia plans to join Ontario in bringing in a blended tax in July.

The federal Conservatives provided Ontario with “considerable flexibility” in implementing the blended tax — something that wasn’t extended to the Atlantic provinces when they harmonized in the 1990s under the federal Liberals, Duncan said.

That flexibility, which allowed Ontario to add other exemptions, seems to be open to other provinces like B.C., he added.

“I do know that they’re going through a similar exercise to Ontario with respect to the agreement they reached with the federal government and with respect to exemptions,” Duncan said.

No other exemptions — including gasoline or home heating fuel — are being considered by the Ontario government, which will table its HST-enabling legislation on Monday, Duncan said.
Other groups, such those lobbying for an HST break on gasoline or mutual funds, are out of luck, he added.