There could be a bigger shock than usual when you open your hydro bill next year thanks to Ontario’s plan to harmonize the GST and PST.
But Innisfil councillors hope the provincial Liberals take their advice by either exempting utility bills from the harmonized tax or cutting out the 7 per cent debt retirement charge for Ontario Hydro.
“Customers using Innisfil Hydro don’t need the double whammy at this time,” said Coun. Lynn Dollin, who spearheaded a resolution that will be sent to Energy and Infrastructure Minister George Smitherman.
The province is planning to blend the 5 per cent federal sales tax with the 8 per cent provincial sales tax July 1 2010, which would create a 13 per cent tax on goods and services across the board.
Ontario consumers are being unfairly taxed on utilities especially when you consider the .7 cents charged for every kilowatt-hour to pay down the Ontario Hydro’s long-term debt, Dollin said.
“It doesn’t matter whether they stop charging the 8 per cent or the debt payment,” she said. “But something needs to happen one way or another.”
George Shaparew, director of Innisfil Hydro, backs Dollin’s push to keep the tax hike off utility bills.
“I haven’t heard too much talk about this from other utilities yet,” Shaparew said. “I’d say Coun. Dollin is probably on the forefront as far as this issue goes.”
Shaparew said the Ontario Hydro debt is expected to be paid off in about five years.
Shaparew said it makes sense to either stall the harmonized tax on hydro until that debt is paid or remove the debt charge from hydro bills.
Increasing bills by 8 per cent will make it even more difficult for customers who are already struggling to pay their utility bills, Mayor Brian Jackson said.
“It just makes it an even more difficult problem to collect outstanding bills,” he said. “When people are struggling, hydro often gets paid last.”
Innisfil’s resolution will be sent to all Ontario municipalities in an attempt to gain their support.
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