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HST Takes Effect Canada Day & Motorists Bracing For Price Hike At The Pumps

This year, July 1st marks the 143rd anniversary of Confederation and the official implementation of the harmonized sales tax in Ontario.

As of Thursday, you’ll be shelling out more money for several items and services, including gas.

The prices at the pumps have been falling over the past two days, but on Thursday the cost of filling up will jump eight per cent.

Many motorists are expected to hit gas stations Wednesday for a top-up. Gas is currently about 96.5 cents a litre, but on Canada Day the price will jump to about $1.04.

Immediate price increases on electricity, diesel, home heating oil and natural gas kick in July 1.

The HST combines the five per cent goods and services tax with the eight per cent provincial sales tax.

Much attention has been paid to items and services that will now be subject to extra tax, including funerals, Internet bills, haircuts, gym memberships, home heating fuel and electricity, new home purchases over $400,000 and live theatre packages.

But 83 per cent of items and services in the province won’t be subject to any new tax.

Some items are exempt from the provincial portion of the harmonized tax, including children’s clothing, books, resale homes, feminine hygiene products and prepared foods under $4.

A look at what’s taxable and what’s not under the HST

And other items are exempt from the HST altogether, including child care services, basic groceries, residential rent and music lessons.

Ontario Premier Dalton McGuinty insists the HST will cut costs for businesses because it will eliminate tax paid at every step of production. He claims those outlets will then pass those savings on to consumers.

The HST also kicks in on July 1st in British Columbia. Quebec, Nova Scotia, New Brunswick and Newfoundland and Labrador also have the harmonized sales tax.

Critics claim it’s an outright cash grab and increasing prices on certain items while the economy is still shaky is bad news for Ontarians.