As Ontario and British Columbia ushered in harmonized sales taxes Thursday, some residents in the two provinces are changing their spending plans to account for the added expenses.
Consumers are facing the new tax scheme following months of debate and protest over the controversial overhaul.
Consumers in Ontario now pay 13 per cent tax on a range of products and services from haircuts to golfing fees -- though some things have been exempted by the government. In B.C., the combined tax will see consumers pay 12 per cent for auto repairs and real estate fees among the products and services affected in that province.
The Ontario government has said it's confident the new tax will make the province a more competitive place to do business and will benefit residents in the long run. Some economists believe it could help create up to 600,000 new jobs in the coming decade.
Ontario has received support from Ottawa, which provided $4.3 billion for the province to distribute to residents to help them deal with the transition to the HST.
In Nova Scotia, the province's existing HST will jump two per cent on Canada Day, bringing it to a total of 15 per cent. The tax increase is expected to put an additional $214.8 million in the province's hands.
Liberal finance critic Leo Glavine says the HST "tax grab" will hurt Nova Scotia businesses by raising costs and making them less competitive with neighbouring provinces.
But Nova Scotia Finance Minister Graham Steele says the changes are part of "getting our province back to balance." The provincial government has also argued that it needs the revenue boost to pay down its deficit.
Kevin Gaudet, the federal director of the Canadian Taxpayers Federation, said there are some differences between the two taxes being introduced in Ontario and B.C.
"I would argue that British Columbia has probably put in place a broader package of tax relief measures that will benefit more people than in Ontario," Gaudet told CTV News Channel during an interview in Toronto on Wednesday morning.
"And in British Columbia, gasoline isn't going to be taxed at the pump. In Ontario, gasoline and diesel will be taxed -- that's going to generate an extra $1.6 billion alone for the Ontario government, that's probably the largest distinction between the two measures of implementation."
Overall, Gaudet predicts consumers will pay more money for most services, though he acknowledges that the HST will benefit large businesses.
His group believes the group should provide more benefits to individuals, in part by providing "broad-based income tax measures that benefit everybody."
Opposition to the HST has been particularly fierce in B.C., to the point where a group called "Fight HST" has managed to collect more than 700,000 signatures on a petition that seeks to repeal the government's actions.
The group is led by Bill Vander Zalm, a former B.C. premier who says the province will not win this fight.
With files from The Canadian Press
