PC MPPs reveal government doubletalk in Estimates Committee

(Queen’s Park, Toronto) Despite claims that the HST will reduce the taxes on businesses, the McGuinty government has negotiated a deal which will cost businesses $3.5 Billion over the next three years by denying promised tax credits. 

In one part of the 2009 Budget the McGuinty government says that businesses will be able to save money by claiming the HST they pay as input tax credits.  However, the McGuinty Government’s Memorandum of Agreement with the Federal Government says they could deny input tax credits for five years and then phase out these restrictions over an additional three years.  According to the Budget Impact Summary table on page 134 of the 2009 Budget these Input Tax Credit Restrictions will mean businesses will be paying $905 Million in 2010/11, $1.26 Billion in 2011/12 and $1.31 Billion in 2012/13. 

MPPs Norm Miller (Parry Sound-Muskoka) and Norm Sterling (Carleton-Mississippi Mills) questioned Finance Minister Dwight Duncan about this discrepancy in this week’s Estimates Committee.

“Businesses have been led to believe they will benefit, but they will not see those benefits until the year 2018,” said Mr. Sterling. 

Mr. Sterling asked Minister Duncan if he was misleading businesspeople by saying in one part of the budget that they would receive a tax credit for the taxes they paid on purchases and then denying it for some businesses and expenses in another part of the budget.    

Duncan and his Assistant Deputy Minister dodged the question, indicating that Sterling’s conclusions were correct.  

The ADM did reveal that this tax grab from business will be used to fund the McGuinty government’s promised corporate income tax cuts, demonstrating this government’s slight of hand tactics.

“This government continues its practice of not being straight forward with taxpayers,” said Mr. Miller, who was named Official Opposition Finance Critic earlier this week.  “This contradiction certainly proves that we can’t believe any of his claims that this is not a tax grab.”

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For more information, call Parry Sound-Muskoka MPP Norm Miller at: (705) 645-8538

or Carleton-Mississippi Mills MPP Norm Sterling at: (416) 314-7900