By Andrew Mayeda December 5, 2009

An overwhelming majority of people in Ontario and British Columbia oppose the HST, with most believing the biggest winners from the new tax will be the provincial and federal governments, according to results of the latest poll.

Both Ontario and B.C. plan to combine their provincial sales taxes with the federal goods and services tax on July 1, 2010. The new measure will raise the amount of tax paid on items such as gasoline in Ontario, and phone and cable bills in B.C.

Eighty-two per cent of British Columbians and 74 per cent of Ontarians oppose the tax, according to the Ipsos Reid survey, commissioned by Canwest News Service and Global National. Moreover, 56 per cent of B.C. respondents and 52 per cent of those in Ontario believe the HST will hurt their provincial economies.

“These are pretty definitive numbers,” said John Wright, senior vice-president at Ipsos Reid Public Affairs. “This is one of those cases where a tax is a tax is a tax, and people see it as something they don’t want.”

In Ontario, the Liberal government of Premier Dalton McGuinty has seen its public support fall in recent weeks, due in large part to a consumer backlash over the HST. According to most polls, the Progressive Conservatives under new leader Tim Hudak are now running neck and neck with the Liberals.

The McGuinty government has noted that the tax will actually reduce tax revenues by $2.3 billion over the next four years, as a result of a series of measures to cushion the impact on consumers, including personal income-tax cuts, credits and rebates. Nevertheless, 82 per cent of Ontario respondents believe the provincial government will benefit very much or somewhat from the HST.

The federal government is providing $4.3 billion to Ontario to further soften the blow to consumers. Still, 73 per cent of Ontario respondents believe the government of Prime Minister Stephen Harper will benefit from the new tax.

Economists estimate that combining the tax will save businesses in Ontario billions, because firms will no longer have to pay tax on inputs such as materials and supplies. However, 46 per cent of Ontario respondents believe the tax will not benefit business, compared with 38 per cent who believe it will help. “If there’s a saving grace for the McGuinty government, it’s that the HST won’t be fully introduced until July, more than a year before the next election campaign,” said Wright.

The political backlash has also been damaging for the B.C. government of Premier Gordon Campbell, with New Democratic Party leader Carole James surging to a substantial lead over Campbell’s Liberals. “It’s clear the impact on the B.C. government has been direct,” Wright said. “Any poll that asks people whether they like a tax is going to show they don’t — no one likes taxes.”

B.C. Finance Minister Colin Hansen was skeptical about the poll. “If every single tax the government tried to change had to pass a popularity test you wouldn’t have any taxes at all,” he said.

The survey also suggests the change could have an impact on consumer spending. Sixty-six per cent of individuals in the two provinces said the HST will affect their daily purchasing decisions, while 86 per cent said they would buy less. Only 16 per cent said they would rush to make “big-ticket” purchases before the tax comes into effect in July.

The poll shows that public opposition to taxes can subside over time — but only to a point, apparently. Forty-four per cent of respondents from both provinces still believe the federal GST, introduced in 1993, has had a negative impact on Canada’s economy.

To complete the poll, Ipsos conducted online interviews with 1,049 adults from B.C. and 1,962 from Ontario. The B.C. poll has a margin of error of 3.1 percentage points, 19 times out of 20. Ontario part has an error margin of 2.3 percentage points, 19 times out of 20.
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