TORONTO - Ontario's embattled Liberals should be worried that the HST has pushed up consumer prices far more than expected, opposition critics said Monday.
Recent inflation figures prove the government's rosy projections about the impact of the tax were way off, said NDP Leader Andrea Horwath.
Statistics Canada reported Friday that consumer prices in Ontario rose 2.9 per cent in July -- the largest year-over-year hike among the provinces.
It also found that the HST accounted for about 1.3 per cent of that increase, much higher than the 0.7 per cent predicted last fall in a TD Bank report that the government often used to justify the tax move.
"If the government's top experts can get it so wrong, then they need to really consider where it is that they're taking this province and what are they putting on the people of this province, in terms of their ability to cope with rising costs," said Horwath.
"I fear the government has just lost touch."
Ontario consumers paid more for gasoline, electricity, auto insurance premiums and home renovation costs, Statistics Canada reported.
Higher electricity prices and more eco fees are also on the way for Ontario families, said Progressive Conservative critic Lisa MacLeod.
Many people, particularly seniors on fixed incomes, have curbed their spending because the cost of essential items keeps going up, she said.
"A lot of the big-ticket items that people have to pay for -- whether it's their gasoline or their hydro -- you have to remember they're going to be hit by HST and also going to see some increases as a result of some of the government's other policies," she said.
"So it's becoming a real challenge."
Both Ontario and British Columbia merged the federal GST and the provincial sales tax in July, at the same time that Nova Scotia increased its harmonized tax by two per cent.
Statistics Canada said the HST accounted for 1.2 per cent of British Columbia's two per cent increase in inflation and 0.8 per cent of Nova Scotia's 1.7 per cent increase.
Ontario and B.C.'s most recent inflation figures "may seem alarming," but inflationary pressures will gradually subside over the next year, TD economist Shahrzad Fard wrote in a note Friday.
When the HST took effect July 1 in Ontario and B.C., producers faced a slightly higher cost of production and that trickled down to consumers who paid more for goods and services, she said in an interview.
"But in the coming months and quarters, we expect those higher production costs related to the HST to subside as producers are eligible to claim those higher costs in the form of input tax credits," Fard said.
"And consumers will then face lower consumption prices then they have since the implementation of the HST."
The most recent inflation figures are yet another hurdle for the Ontario Liberals, who've been under fire all summer.
The government was forced to retreat on the highly unpopular eco fees that were slapped on thousands of products on Canada Day, the same day the equally unpopular HST kicked in.
There was also widespread criticism of a so-called secret law governing police powers during the G20 summit, a damaging ombudsman's report about Ontario's much-maligned local health networks, a big cut in rates for solar energy projects that angered farmers and flip-flops on online gambling and mixed martial arts fights.