What Does the HST Tell Us?

I got a very well organized and informative guide in the mail today called “What changes –and what doesn’t change– under the HST”, which may be one of the very few things I like about this new Ontario tax scheme.

Governments often use taxation to try and influence of buying behaviour of their citizens, so I thought I would take a look and see what behaviours the government is trying to change with the HST:

  • Smelly Ontario – Apparently they want us to dry-clean less, with taxes going from 5 to 13%
  • Drunk Ontario – Alcohol will be taxed at 13% instead of the old 17% (although they footnote that they will stop people from drinking so much with ‘other fees’)
  • Lazy Ontario – Gym, athletic memberships, fitness trainers, hockey rink rentals, hall rentals, hunting licenses, fishing licenses and golf green fees will increase from 5 to 13%
  • Ugly Ontario – Hair stylists, barbers and aesthetician services up to 13% from 5%
  • Lawless Ontario – Legal fees will be taxed at 13% instead of 5%
  • Cold (winter) and Hot (summer) Ontario – Electricity & heating bills to go from 5 to 13% tax
  • Flooded and Electrocuted Ontario – Home visits by plumbers, electricians, etc. will go from 5-13% as will home renovations
  • Digitally-divided Ontario – Internet access will now be taxed at 13% instead of 5%
  • Wild Ontario – Landscaping and snow removal up to 13% from 5%
  • Homebound Ontario – Hotel rooms (from 10%), taxis, campsites, domestic air, rail, boat and bus travel all up to 13% from 5%, as does fuel for your car, unfortunately you will have fewer magazines to read at home since subscription magazines also go from 5 to 13%
  • Double-dipped Ontario – Remember that new car that you paid 13% tax on, well now the government makes 13% again –up from 5%– when you sell it used!
  • Suburban & Condo Ontario – New homes over $400,000 will be taxed at 13% instead of 5%, and AFAIK can only be found in the suburbs or in condo dwellings. Real estate commissions will also be taxed more, at  13% instead of 5%.
  • Scurvied Ontario – Vitamins up to 13% from 5%
  • Stiff & sore Ontario – No reduction on Viagra tax, they are increasing taxes on massage therapy from 5 to 13%
  • Entertained Ontario – Tickets for professional sporting events and movies will DROP from 15% to 13%.
  • Alive Ontario – Death will cost you more, with funeral services taxed at 13%, up from 5%… sure as death and taxes.

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    I’m GLAD We Didn’t Own the Podium

    14 Golds, and #14 being the Men’s Olympic Gold, no Canadian could have asked for a better result! What an amazing Olympics!!

    But there were at least a few Canadians that did expect more.

    Men’s Pursuit Speed Skating Gold Medalists by mariskar

    Own the Podium, a >$110M investment to get Canada to the top of the medals list, almost ended in disaster. It was only the last few days of the games where we went from 5th place and a decent medal count to #3 with a record gold medal haul. If not for the last minute push, all this money would have seemed a poor investment.

    Own the Podium is patterned after the success of other countries –notably Australia– who created similar programs netting great success in the summer games. Perhaps it is the way that media has decided to cover these initiatives, but I got the strong impression it was expected that money would directly translate into medals. Effectively, you could buy your way to the top of the podium.

    This makes some intuitive sense, one of the longest standing arguments about the Olympics is if you should allow professional athletes into the games. Professional athletes have their own ‘Own the Podium’, where their professional status allows them to perfect their endurance and skill with full-time focus. Is there any surprise that the dynamic of Olympic hockey or basketball completely changed when pro athletes were allowed?

    We need a lot more than money to own the podium.

    As I was watching Tessa Virtue and Scott Moir put on the performance of their life to win gold in Ice Dance my ears perked up when I heard that they had been dancing together for 13 years. Wow, they must be able to read each other’s minds when they are on the ice! 13 years reminded me of the 10 years or ‘10,000 hour rule’ that Gladwell popularized in Outliers, describing the time commitment to become exceptional at something.

    There is much debate about this ‘rule’, but I think you will also question how much a program launched 5 years ago (Own the Podium was Launched in 2005) can impact the success of stars that have been 13 years in the making?? Clearly the impact isn’t zero, our success has improved, and the athletes sounded very genuine when they thanked the Own the Podium after winning their medals.

    If we ‘owned the podium’ with a 5 year effort I think we would be selling ourselves short.

    Germany & USA, the countries that beat us in the medal standings, have been developing their amateur athletic programs for years via various means (note they were also the top 2 in Turin 2006 and in the top 3 in 2002): The USA through their strong varsity programs, plus a concerted effort to beat the Soviets during the cold war, and Germany through cold war funding on both sides, plus a strong desire to rebuild a national identity tarnished by two World Wars. Each of these countries are benefitting from the strong community of athletes, coaches and facilities that have been build up over decades of olympic success.

    Owning the podium needs a concerted and consistent effort supported by funding and a rich support network of people that have experienced their own olympic success.

    And that’s the good news.

    With our 14 gold medals, we have now doubled the number of golds that were won by Canada in the previous two olympics (Turin 7 & 7 in Salt Lake), and have a new generation of people who have stood at the top of the world in their sport. This new generation will inspire and teach our next generation of athletes and non-athletes the commitment, effort and mindset required to succeed, with (I hope!) the sustained support of Own the Podium or programs like it.

    Isn’t $110M a lot of money for olympic success? Actually, it is a pittance. For perspective, $110M is about what a new high-tech start-up has to raise to make it from inception to having a product to sell to the market. Its well known that 9/10 businesses fail. With this $110M, and the much more significant volunteer effort that it supports, Canada stands on top in a record 14 events, and is world class in 10’s of others. Or to put it another way, about $3 per Canadian to remind us how great a diverse-yet-united nation we are, and how proud we all are to be Canadians.

    And that is why I am glad we didn’t own the podium: Because we still have something to strive for, something to justify the continued long-term investment that is required to be competitive on the world athletic stage, and reap the many direct and indirect benefits for years to come. And to remind us it isn’t that easy!

    What do you think?

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