Duane Hicks
With the Harmonized Sales Tax (HST) slated to take effect July 1, district businesses got a rundown of the myriad of changes that await them at a Canada Revenue Agency information session here last Wednesday evening.
Called “The Transition to Harmonized Sales Tax-Information for Businesses,” the session was led by CRA reps Ken Kemp and Julia Verhoeven and attracted about 120 people from across Rainy River District.
The session offered plenty of information and examples, and was followed by a question-and-answer period.
Those on hand had mixed feelings about the new HST.
“I don’t think it’s going to be a great benefit because they [salon customers] weren’t taxed provincially before and they’ll get hit,” noted Mike Tullio, owner of Nirvana here.
“Everybody’s going to pay the extra tax.
“I don’t think it’s going to benefit the business,” Tullio added. “Personally, I don’t see how it’s going to be benefit anybody.
“I still can’t figure that one out.”
Tullio said while it shouldn’t be too hard to make the transition to the HST as far as the accounting goes, it likely will affect some business decisions.
“I think it’s going to change the way you do business for the next little while,” he predicted. “If you had a mind to, say, raise prices to keep up with inflation, I think you’d probably hold back somewhat because you don’t want them to get that double hit.”
Kim Williamson of Skills and Employment Source said she was disappointed Wednesday night’s information session didn’t address not-for-profit organizations.
But wearing a second hat on behalf of Melvin Williamson Timber Ltd., Williamson said she found it interesting that businesses no longer will get PST exemption up front on some purchases, but will have to pay the full 13 percent and then get that eight percent PST portion back when they file their HST claim.
Where this could prove problematic for businesses is with big-ticket items.
As one man pointed out at the session, if a logging company has to buy a $100,000 piece of equipment and pay the extra eight percent at the time of purchase, that company will get the PST portion back but be out of pocket for $8,000 until they file their claim each quarter.
Williamson also noted businesses will be required to file their HST claims electronically, and questioned whether all businesses located in some parts of Northwestern Ontario even have Internet access.
“We operate our business in Nickel Lake and access to Internet is quite difficult,” she remarked. “We have Internet now, but we had to get a satellite dish to do that.
“The government is moving forward, but they don’t seem to realize we’re still quite remote, some of us that live in the bush. . . .
“Some businesses that operate in the old-fashioned way, I don’t know how that will affect them,” Williamson said.
Bill Gushulak of Fort Frances General Supply, who wasn’t able to attend last week’s seminar but did meet with Revenue minister John Wilkinson last fall when he was in Fort Frances to speak about the HST at the Northwestern Ontario Association Chambers of Commerce meeting, said he’s not sure what the impact will be.
“It’s going to simplify one side of it,” he noted. “But on a personal level, I think there’s going to be other costs involved.
“The ones promoting it are saying it’s going to be good, the ones that don’t want it are saying it’s not going to be good at all,” he added.
“I really don’t know. I guess whatever the government of the day says we have to do, we’ve got to do.”
Regardless of one’s feelings about the HST, Gushulak did feel the transition for some businesses should be easier than it was with the GST.
“Nowadays, with computers, it’s not that big of a deal to put it in place,” he reasoned. “The computer program we run has already been programmed so that July 1, if everything falls into place, we’ll start charging the different taxes.”
Angela Halvorsen, business advisor with the Rainy River Future Development Corp., said yesterday she has requested the CRA hold another such information session here in the near future, but added it remains unknown at this time whether that will occur.
