GST Reduction: Much Ado About Nothing

Giving to the rich what belongs to the poor

LARRY BAILLIE

ILLUSTRATION BY CHRIS SIMONITE

On July 1, the much heralded one per cent GST decrease came into effect. It is hard to believe that the government has reduced the GST by one per cent. So, on Saturday, July 1 while driving to the Bomber game, I stopped at Tim Hortons for my coffee. The price was no longer a $1.65, it was $1.64, and this got me wondering how much the beer would be at the stadium. Since the price was $6.50 before July 1, would it now be $6.44 or $6.43? I soon found out it did not change.

Being a social work student I asked, “How would the average family benefit from the GST cut?” What about families and individuals living in poverty — how much would they save on the GST decrease? Many families living on social assistance and one-parent families would find it difficult to have a disposable income anywhere near $10,000 a year, which would be a savings of $100.

That reminded me of a statement by Henry Ford: “If you save ten steps a day for each of the 12,000 employees, you will have saved 15 miles of wasted motion and misspent energy.” According to the Canadian Press, many municipal facilities with a flat rate facility charge did not decrease their user fees. Jacqueline Couture, a spokesperson for the Canadian Revenue Agency stated that if a city or business charges the consumers seven per cent after July 1 they would have to remit it to the government — unless they say the one per cent decrease is used as a fee increase, which can happen and the CRA has no control over that. Also according to the CRA if you paid the extra one per cent after July 1 you could apply for a refund as long as the refund is over $2. According to Adam Taylor a spokesperson for the Canadian Taxpayers’

It appears that the largest benefactor of the GST decrease is big business and wealthy individuals and families from within and outside Canada.

Association “This was a tax cut that was supposed to benefit taxpayers and consumers, not municipal governments.” These services include such things as municipal swimming pools and recreation facilities. The majority of the people using these services are low-income Canadians, who are flocking to municipal swimming pools for relief from the heat.

At the same time, wealthy Canadians get relief from the heat relaxing in their air-conditioned homes, by their swimming pools, or at their own private getaways in cottage country with the lake only steps away. What this does say is the GST reduction has more advantages for governments, big business and the wealthy than the majority of Canadians. The GST reduction took effect on July 1. Gas prices in Winnipeg have not seen the one per cent decrease at the pumps. The vending machines at the university operated by Aramark have not been reduced to reflect the GST decrease. Both Aramark and Centreplate are U.S. conglomerates in the food industry with a large market share in Canada. According to the Canadian Revenue Agency, consumers will have to police the GST reduction, since there are no fines for businesses or municipalities who do not pass on the decrease to the public.

How does the Prime Minister see the GST decrease as a good thing for Canada? In July, personal income tax was increased from 15 per cent to 15.5 per cent on the first $35,955 of income, at the same time the federal members of Parliament increased their cost of living allowances by 20 per cent. Further to the 0.5 per cent income tax increase is an additional claw-back of the same value that will take place over the next six months to account for an overpayment in the first six months, so most Canadians will be deducted one per cent till Dec. 31 on the first $35,955. This is now starting to look like smoke and mirrors, performed by a master magician or spin doctor.

A goal of many businesses is to get your business and increase their profit and market share. I propose that individuals think like big business, shop around for the best prices on products we consume. Invest in coupon books, which have coupons for products and services that you utilize. In looking for the same products at a reduced price, people could save approximately 10-20 per cent. If transnational conglomerates can save millions of dollars by shopping around, I advise individuals to do the same.

As students and citizens, we have to find our collective voice; the federal government has to explain why the GST did not take effect on all businesses, including municipal services, gas prices, and flat-rate price products. We’re taliking about millions of dollars that will benefit a wealthy few at the expense of Canadian taxpayers. As taxpayers, we should strongly recommend that the federal government seek legal action against businesses and municipal governments for unfairly profiting on the GST reduction. This money could then be used to help fund antipoverty programs and reduce tuition at many post-secondary institutions. If the Canadian government truly wants to save people by reducing the GST, I encourage the government to address this issue immediately.

Larry Baillie is a social work student of the University of Manitoba.





Volume 94 Issue 3	The Official University of Manitoba Students' Newspaper Website	August 23, 2006

Home About Us Advertise Contact Staff Current Issue PDF Employment Letters to the Editor Meet the Staff Online Archives Personals Volunteer	Font Size Respond Email Print-Friendly GST Reduction: Much Ado About Nothing Giving to the rich what belongs to the poor LARRY BAILLIE ILLUSTRATION BY CHRIS SIMONITE On July 1, the much heralded one per cent GST decrease came into effect. It is hard to believe that the government has reduced the GST by one per cent. So, on Saturday, July 1 while driving to the Bomber game, I stopped at Tim Hortons for my coffee. The price was no longer a $1.65, it was $1.64, and this got me wondering how much the beer would be at the stadium. Since the price was $6.50 before July 1, would it now be $6.44 or $6.43? I soon found out it did not change. Being a social work student I asked, “How would the average family benefit from the GST cut?” What about families and individuals living in poverty — how much would they save on the GST decrease? Many families living on social assistance and one-parent families would find it difficult to have a disposable income anywhere near $10,000 a year, which would be a savings of $100. That reminded me of a statement by Henry Ford: “If you save ten steps a day for each of the 12,000 employees, you will have saved 15 miles of wasted motion and misspent energy.” According to the Canadian Press, many municipal facilities with a flat rate facility charge did not decrease their user fees. Jacqueline Couture, a spokesperson for the Canadian Revenue Agency stated that if a city or business charges the consumers seven per cent after July 1 they would have to remit it to the government — unless they say the one per cent decrease is used as a fee increase, which can happen and the CRA has no control over that. Also according to the CRA if you paid the extra one per cent after July 1 you could apply for a refund as long as the refund is over $2. According to Adam Taylor a spokesperson for the Canadian Taxpayers’ It appears that the largest benefactor of the GST decrease is big business and wealthy individuals and families from within and outside Canada. Association “This was a tax cut that was supposed to benefit taxpayers and consumers, not municipal governments.” These services include such things as municipal swimming pools and recreation facilities. The majority of the people using these services are low-income Canadians, who are flocking to municipal swimming pools for relief from the heat. At the same time, wealthy Canadians get relief from the heat relaxing in their air-conditioned homes, by their swimming pools, or at their own private getaways in cottage country with the lake only steps away. What this does say is the GST reduction has more advantages for governments, big business and the wealthy than the majority of Canadians. The GST reduction took effect on July 1. Gas prices in Winnipeg have not seen the one per cent decrease at the pumps. The vending machines at the university operated by Aramark have not been reduced to reflect the GST decrease. Both Aramark and Centreplate are U.S. conglomerates in the food industry with a large market share in Canada. According to the Canadian Revenue Agency, consumers will have to police the GST reduction, since there are no fines for businesses or municipalities who do not pass on the decrease to the public. How does the Prime Minister see the GST decrease as a good thing for Canada? In July, personal income tax was increased from 15 per cent to 15.5 per cent on the first $35,955 of income, at the same time the federal members of Parliament increased their cost of living allowances by 20 per cent. Further to the 0.5 per cent income tax increase is an additional claw-back of the same value that will take place over the next six months to account for an overpayment in the first six months, so most Canadians will be deducted one per cent till Dec. 31 on the first $35,955. This is now starting to look like smoke and mirrors, performed by a master magician or spin doctor. A goal of many businesses is to get your business and increase their profit and market share. I propose that individuals think like big business, shop around for the best prices on products we consume. Invest in coupon books, which have coupons for products and services that you utilize. In looking for the same products at a reduced price, people could save approximately 10-20 per cent. If transnational conglomerates can save millions of dollars by shopping around, I advise individuals to do the same. As students and citizens, we have to find our collective voice; the federal government has to explain why the GST did not take effect on all businesses, including municipal services, gas prices, and flat-rate price products. We’re taliking about millions of dollars that will benefit a wealthy few at the expense of Canadian taxpayers. As taxpayers, we should strongly recommend that the federal government seek legal action against businesses and municipal governments for unfairly profiting on the GST reduction. This money could then be used to help fund antipoverty programs and reduce tuition at many post-secondary institutions. If the Canadian government truly wants to save people by reducing the GST, I encourage the government to address this issue immediately. Larry Baillie is a social work student of the University of Manitoba.


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