You are currently browsing the tax tag archives.

Yet Another Postal Rate Hike

Posted 2010.12.10 9.59 in Pointless Blather

So Canada Post’s website is announcing yet another increase in the cost of sending mail. They raised the prices last January. In July, the introduction of the Harmonized Sales Tax represented another hike in the cost of sending a letter. And now they’re going up again this January.

Sure, you could claim that the HST wasn’t really a rise in the cost of stamps. I guess not. But it was a rise in the cost of mailing a letter. Overall, the cost of mailing a letter in Canada will have gone up 10 cents in the course of a single year, once the new rates hit next month. That’s a 17.5% increase, incase you’re keeping score.

Here’s the breakdown:

  • This time last year, a domestic 1st-class letter stamp cost 54 cents. Ontop of that, you had to pay 5% sales tax (GST). This brought the total cost of mailing a letter within Canada to 56.7 cents. (They’d charge you 57 cents at the register.)
  • In January 2010, they raised the price of a stamp to 57 cents. Now with the 5% sales tax, the cost of mailing the letter became 59.85 cents (that’s 60 cents at the register.)
  • On July 1st, the sales tax was raised by 8% (here in Ontario) where we went from 5% GST to 13% HST. This brought the total cost of mailing that same letter to 64.41 cents (64 cents at the register.)
  • And next month, the same 1st-class letter stamp will reach 59 cents. Add the 13% sales tax and you get 66.67 cents, which will be rounded to 67 cents at the register.

That’s a 10 cent increase over a 12-month period. 5 of those cents are on the face-price of the stamp, the other 5 are in sales tax. From 57 cents to 67 cents, is an increase of 17.5%.

Obviously, fewer people are using snail-mail. What with email, being able to pay bills online, et cetera. So for most folks, it’s probably not a big deal. If you only send a couple letters a month, then it’s maybe going to cost you 2 or 3 dollars at the end of the year.

For small businesses however, I think it is a big deal. If your business needs to mail invoices, cheques, and other stuff that isn’t a good fit for email, then your costs of running the business have gone up measurably. If you send out a couple hundred invoices per month, these rate hikes become a lot more significant.

Or how about people who aren’t computer-savvy and still rely on the postal service, folks on a fixed income… I’m thinking about older people, retired folks, like my parents.

Anyhow… it’s not the first time for a postal increase and it won’t be the last. (Canada Post have already stated they intend to raise the rates 2 cents per year till 2014.) It’s just that it feels like a tripple-whammy with the recent tax hike hitting only a few months ago.

HST Looming in Ontario & B.C.

Posted 2010.05.31 13.19 in Pointless Blather, Work

With the HST (known as VAT in other parts of the world) only a month away now for Ontario and B.C., it’s still mighty hard to find crucial information. It’s out there, but they seem to be going to great lengths to hide it. Reminds me of the planning notice that Arthur Dent found, that let him know about his house’s impending demolishment. On display in the bottom of a locked filing cabinet, in a disused lavatory in the cellar, where the lights didn’t work and the stairs were broken, and a sign outside the door saying “Beware of the Leopard.”

So the information is out there, and if you happen to run a business or just need to know about the tax laws, then it’s up to you to check the government’s websites on a regular basis and dig and scrounge for information – bearing in mind that it might be wrong, outdated, or superceded next week. Eg. the Ontario government set up a toll-free number you could call to get information on the new rules. I called the number and asked some very specific questions. The answers I was given sounded authoritative and informative. Some of them were wrong, or contradicted information provided by other venues.

By and large, I don’t expect that prices of most goods or services will go up much, and I don’t expect them to go down at all. There are certain areas though where the general public can expect to receive a good solid boot to the head. For instance, the price of postage had a fairly stiff increase in January – from 54 cents to 57 cents for a normal first-class letter within Canada. This will see another jump due to the tax increase, from 5% to 8%. So a 57 cent stamp (which currently costs 60 cents) now, is going to cost 64 cents in July. Factoring the increase in postage and the increase in taxes, this means an overall price hike of  7 cents, within 6 months. Not a lot of money for a single stamp, but what if you use a hundred a month? That’s a 7 dollar increase.

Read more »

Tax Time

Posted 2010.04.29 1.51 in Pointless Blather, Work

That time once again. It seems like it comes around every year like this. Income tax. Bleargh.

I try not to procrastinate, I try to be good. Well when I say try, what I mean is that I think about it. I start thinking about doing my taxes in February. It’s a chore though and seems tiring, so thinking about it makes me sleepy.

Then March comes around, and I think about it some more. By March, all the various forms and receipts have usually arrived in the mail. I know I ought to sit down and do it. It’s not too bad if I space it out over two weekends – a couple hours the first weekend to sort & add up my receipts, then a couple hours the next weekend to fill in all the forms and do the maths and figuring.

Then April comes in and I realize I really have to get serious and set aside some time for it. Maybe just one weekend instead of two. If I spread it out over Saturday and Sunday, then it’s not so bad, two smaller chores instead of one big one. Still, it’s no fun, and all the maths and numbers make my head hurt. Then the headache makes me sleepy.

And ultimately, I find myself with about 30 hours to the deadline, sitting up at 2:00am with a calculator, notepad, and a zillion slips of paper, trying to get through it without falling asleep.

Next time, I’ll be good. I won’t procrastinate.

Come to think of it, I’ve got like 30 hours or so left, I might just go to bed and finish this stuff later.

HST Lies & Misinformation

Posted 2009.12.16 12.43 in Pointless Blather, Work

So far, it looks like Ontario is still going ahead with this HST nonsense. Mostly, I don’t really care one way or another – it’s a zero-sum change for me. Being an entrepreneur and working in small business, whether the GST is 5% or 13% is largely irrelevant due to the way the tax is managed with the ITCs balancing the taxes collected.

One thing that I really dislike though, is when governments lie and mislead in order to push their agenda through.

Will the move from GST (5%) + PST (8%) to HST (13%) cost the average consumer more money? No. The 13% rate won’t apply to stuff that’s currently PST exempt.

It’ll be a huge pain in the ass for programmers and accountants etc. to get this set up for retailers’ POS systems, but generally speaking the actual tax rate isn’t going to change.

They don’t need to add lies or misinformation to sugar-coat it. What am I talking about? Specifically, this paragraph I keep coming across in the Ontario Ministry of Revenue‘s website:

Right now, provincial sales tax is paid by most businesses at each step in the creation of a consumer product. In other words, though you may not realize it, the PST is charged multiple times during the production of a product before that product reaches the store. So it can be a tax on a tax on a tax, all hidden in the cost of a product until it gets to the consumer. Under the HST, most taxes paid on business inputs will be refunded to the business — savings that can be reinvested and passed on to consumers.

I’ve been working with small businesses for over two decades. I can tell you that the PST is not charged multiple times during the production of a product. This is simply a flat-out lie.

Read more »

Pissed Off About The Bag Tax

Posted 2009.07.07 16.29 in Pointless Blather

I stopped in at my local A & P today on my way home. Just for a few quick things I needed to pick up – not a full blown shopping expedition. So naturally I didn’t have a handy supply of reusable canvas shopping bags with me.

Yeah the local shops here have started charging 5 cents for the plastic bags, and advertising the reusable ones they charge you $2.00 for. Which is fine. The canvas ones are more comfortable on the hands anyways, and a nickle is pretty meaningless small change now.

I don’t care if the retailers get to keep the nickle or if it goes to the city or province or whatever. It doesn’t make a bit of difference where the money goes – it comes out of my purse, and its levied at the register like all the other taxes. It’s the bag tax. But whether it goes to the retailer, the city, province, nation, the united nations, or they melt them all  down and make a giant rocket and launch them to heaven, I don’t really care about that. Its still just a nickle.

What really pisses me off about the bag tax is that the cashiers seem to be programmed to use as few bags as possible. A few months ago I thought they were wasteful for using 6 plastic bags where 4 or 5 would suffice. Now they’re trying to squeeze 3 bags worth of stuff into a single bag.

Read more »