TORONTO - Ontario's Liberal government expected to earn nearly $1.6 billion by adding the HST to energy costs, but Premier Dalton McGuinty flatly rejects claims the new tax has meant a windfall for the province.
Documents obtained by the New Democrats show the government estimated that adding the eight per cent provincial portion of the HST to diesel, fuel oil, natural gas, gasoline and electricity would bring in an estimated $1.57 billion in its first year.
The NDP pointed out the 2009 estimate of HST revenues was based on lower energy and gasoline prices than people are paying now.
"That calculation does not include this government's 50 per cent
increase in hydro rates, OPG's proposed 6.2 per cent rate increase,
the $18 million that utility companies will soon be collecting from customers...or gas prices that are now at their all-time high in two years," said NDP Leader Andrea Horwath.
"Were the McGuinty Liberals unwilling to tell families the true impact of their HST because they knew just how hated their unfair tax has become?"
There's no doubt the government has had a windfall from the HST as prices rise, said Progressive Conservative Leader Tim Hudak.
"The government's raking in a lot of money from that HST tax grab, and everybody knows it," said Hudak.
However, speaking to reporters after an unrelated event in Vaughan, McGuinty said the HST would actually cost the province about $3.4 billion in the first three years.
"I don't know where the windfall is coming from," said McGuinty.
"I do know that there's a net cost to us for our package of tax reforms that we put in place, a few billion dollars it's costing the treasury."
Finance Minister Dwight Duncan told the legislature consumers are better off because the HST was combined with income tax cuts and other incentives, including cheques of up to $1,000 for some families.
"When you factor in our tax credits, when you factor in the personal tax cuts, when you factor in the one-time payments, Ontario families are further ahead," Duncan told the legislature.
However, the NDP said the point is rising energy costs are benefiting the government and hurting consumers, so they want the sales tax removed from energy bills.
The Tories said removing the HST from energy costs, including gasoline, were among the proposals they are considering for their campaign platform.
Rising electricity costs prompted the government to introduce 10 per cent rebates starting this year, at a cost of $1 billion, in order to reduce voter anger in advance of the Oct. 6 election.
The opposition parties also pounced on the government Wednesday for not blocking a decision by the Ontario Energy Board to let local utilities raise rates to cover $18 million in fines and court costs they were assessed for charging too much interest on late payments.
"Ontario families were overcharged for late payments with punitive interest rates," said Hudak.
"They won a victory when the superior court ruled that utilities were in the wrong and that the interest rates were illegal...Why is it, when Ontario families win in the courts, you still make them pay the price of illegal activity?"
Energy Minister Brad Duguid said he directed government-owned Hydro One not to raise rates to cover the fines, and is recommending local utility companies do the same.
