April 2010

[Ally]

HST to ding home buyers July 1

When it comes to the 13-per-cent harmonized sales tax kicking in July 1, lots of home buyers and sellers appear to be in for a big surprise, says the Canadian Real Estate Association.

"I run into people who still don`t know its coming," says association president Pauline Aunger. "There are people who don`t listen to the news or read the newspaper."

The controversial tax doesn`t apply to resale homes, but it does hit new ones — with a 75-per-cent rebate on the first $400,000 of the price tag — as well as real estate commissions, legal fees, home appraisals and moving costs.

Aunger urges people buying or selling homes and condos to close their deals before Canada Day if possible, noting the average buyer of a re-sale home could save about $1,500 by beating the controversial new tax.

The HST is a marriage of the broadly based 5 per cent federal Goods and Services Tax — already charged on the above items and most goods and services — and the 8 per cent provincial sales tax in Ontario, which does not now apply to real estate commissions, new homes and the like.

That means an extra 8 per cent in taxes, although the government notes it cut income taxes Jan. 1 to help offset the HST hit.

Read the full article here.

 

[Ally]

Ontario`s quiet taxes through regulation

Canada`s constitution and the case law that surrounds it define the relative jurisdiction and powers of the federal government and the provinces. In matters of taxation, government authority is extensive, and legislatures may enact laws imposing a wide range of taxes.

Despite these broad powers, governments are limited in what they may do without legislative approval. They may use regulation, which is not approved by a legislature, to set fees to recover the costs of goods or services they provide to the people being charged the fee. They may not, however, use regulation to impose taxes that fund the general activities of government.

Provincial governments have often sought to raise revenue quietly through regulation. The reasons include convenience and a desire to avoid political embarrassment in the legislature. In Ontario, the Taxpayer Protection Act, 1999 requires an approving referendum to be held before tax increases. While this kind of legislation can be overridden by subsequent statutory amendments (which Ontario has done twice before), the process makes raising taxes politically costly.

By a recent Order-in-Council, the Ontario government passed Regulation 66/10 to the Ontario Energy Board Act, 1998. This new regulation directs the Ontario Energy Board to assess a special levy on the Independent Electricity System Operator ( "IESO") and distributors, assessed in proportion to the amount of electricity they distribute. The levy is designed to deliver to the province $53.7-million in additional revenue to fund activities of the Ministry of Energy and Infrastructure. Is this levy a tax?

From the perspective of the Constitution Act, 1867, taxes are either direct or indirect; in Canadian law, a direct tax is paid by the person on whom a charge is levied, and an indirect tax is passed on to others, as with most sales taxes. Under subsection 92(2) of the Constitution, provinces have the jurisdiction to impose direct taxes but not indirect taxes. Provinces have other "heads" of constitutional power that permit the imposition of fees, as discussed below, even if the fees look like they otherwise might be constitutionally invalid indirect taxes. In no case, however, does a province have the constitutional ability to impose a tax -- direct or indirect --through regulation alone.

Read the full article here.

 

[Ally]

Retail sales lower than expected as Ontario struggles

Retail sales increased for the third time in three months across the country but fell short of analyst expectations, as Ontario`s numbers continued to lag behind most of the other provinces.

In February, retail sales across the country rose 0.5 per cent in current dollars to $36 billion, according information released Friday by Statistics Canada. Higher sales at new car dealers were cited as the main contributor behind the increase.

Ontario reported a 0.1 per cent increase in February over the previous month and a 4.4 per cent increase compared to the same period the previous year. In monthly terms, British Columbia posted the same low numbers as Ontario, but recorded a 9.1 per cent increase from the same period last year.

During the last year Ontario has reported some of the smallest gains in retail sales, said Douglas Porter, deputy chief economist, BMO Capital Markets.

"It does lag a bit behind what we are seeing across the rest of the country and just shows the province as a whole is still struggling a bit compared to most of the rest of country," he said. However, a 4.4 per cent gain is nothing to sneeze at, he said.

National sales were lower than expected, said Porter.

Read the full article here.

 

[Ally]

Don`t rush into home buying, cautions Income Property host

Those first spring blooms herald not only patio weather, but also the season of bidding wars and crammed open houses. And this year, the impending HST on new homes and looming interest rate hikes are making the market even more frantic.

For buyers considering this market, real estate entrepreneur Scott McGillivray advises: "If you can wait, I would wait. You`re buying at the top of the mountain right now."

The Income Property host, who`s just wrapping up filming the third season, scheduled to air in the fall, says that at this time of year he`s normally a seller, not a buyer.

"Usually, patience pays off in the real estate hunt," he says, explaining that September to December tends to be the best time to buy, as the only people listing their homes then are the ones who need to sell. So long as you`re willing to accept the inconveniences of winter-time moves, waiting can get you a better deal.

"I never buy in the spring unless something really exceptional comes across my plate," he adds.

Read the full article here.

 

[Ally]

GM to invest $890M at 5 plants, incluing St. Catharines, Ont

TORONTO -- General Motors Co. confirmed Tuesday it will invest more than US$890-million in five North American plants, including a plant in St. Catharines, to produce next-gen truck and car engines.

The Detroit-based automaker will pump US$235-million into engine production at the St. Catharines plant, creating 400 jobs.

The plant in Tonawanda, NY will get the most cash, US$400-million for more than 700 jobs.

In total, GM estimates the investments will create or retain more than 1,600 jobs. The cash will also be used for facility renovations and installation of new engine machining and assembly equipment.

The three other plants getting cash are Defiance, Ohio, Bedford, Indiana, and Bay City, Michigan.

Details of the investment had been reported in various media outlets as early as Monday evening.

Read the full article here.

 

[Ally]

Is Toronto a second-rate city?

ask this because there seems to be this disconnect between people moving into the city and those that once ruled the city years ago.

If you talk to someone of a certain age who lived in the city years ago, Toronto was a much desired city to live in as well. Now, to them, not so much. People respected each other and neighbours knew each other.

Toronto was a cleaner and nicer place to live in. I think the city has gone off track but is still generally a good place to live, play, and work in.

People took pride in the city, how could you argue against being full of pride, Toronto was once seen as "New York run by the Swiss" in that we had the big city feel with the rational, efficient, governance needed to run a metropolis. While people took pride in their surroundings, they were also accountable for their actions.

Fast forward years later and Toronto is no longer "New York run by the Swiss" but rather "New York overrun by the unions". No one is accountable for their actions anymore. How many times have you heard "It`s not my job" or "Someone was supposed to…"?

This new me-first attitude is, unfortunately, generally reserved for Generation Y but has been commonplace in City Hall and of those who left the city long ago.

Read the full article here.

 

[Ally]

Why British Columbia, Ontario need HST

On July 1, the cost of becoming more productive and competitive will fall significantly in British Columbia and Ontario, as the harmonized sales tax replaces the provincial sales tax.

The provincial sales tax directly adds to the cost of machinery, equipment and the technology we need to invest in if our businesses are to become productive enough to survive in global markets. The new tax -- the HST -- can be deducted from the tax collected when the firm sells its final output. Not only will this save our industries billions of dollars, but it will also go a long way to helping us deal with a strong dollar and improve our economy and our lives.

Better than Americans?

Canadians think we are at least as good as Americans, if not better. We are more polite than they are. We say please and thank you more often. We don`t carry arms. And Canadian citizens, if not always Canadian teams, play the best hockey.

There are also many similarities. We speak the same language as our U.S. neighbours, shop in similar malls, live in the same kinds of houses and hold the same kinds of jobs. Moving south of the 49th parallel is not nearly as big a change for Canadians as moving to Asia, Africa or even South America or Europe.

Read the full article here.

 

[Ally]

Auto sales growing as economy improves

Global car sales are soaring as countries worldwide continue to recover from the economic recession of the last few years, according to a new report from Scotia Economics.

Auto sales grew 25 per cent year-over-year in March - the sixth consecutive double-digit increase, according to the Scotiabank`s Global Auto Report released Friday.

"The emerging nations ... are leading the way with year-over-year gains in excess of 40 per cent," said Carlos Gomes, senior economist with Scotia Economics.

The report also found that new vehicle prices are rising in both Canada and the United States, and that consumers are buying more expensive models.

Gomes said Canadians are shifting from smaller, lower-priced cars to more expensive light trucks.

Read the full article here.