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HST in Canada

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by oz_media

Closed to new repliesThis discussion is closed. It stays readable, but it takes no new replies.

Foro those of you who aren't aware, Canada's Liberal party is seekign to impose a Harmonized Sales Tax on ALL goods, of 12%, as opposed to the PST and GST we pay on select goods now.

The Liberals (Canada's centre) suggest it will balance itself out as it will reduce processing costs for companies who will in turm be ale to lower prices a few points. The NDP (Canada's democrats)have started an online petition to oppose teh new tax, which will be tabled on in Burnaby BC next week.

I know there are a few Canadians here and this has raised some strong concerns from people, I'd also like to get some comparative political history from JamesRL if you are around.

I've never trusted the NDP, especially in BC, but I really don't support HST being applicable across the board, restaurants etc. where we've never paid both taxes.

I actually ignored this issue for a while but I just received an email from a friend, like a chain letter, looking for HST support. I don't agree to NDP actions though I do oppose HST for teh most part even though I understand the concept I don't see it balancing out as they suggest, so I will pass but I am interested in mor eof an Eastern Canadian view, and of course if there are actually ANY Americans who follow Canadian politics (for what reason I don' know)chime in.

So that's our huge political issue right now,it even made the news this time!! LOL, whether to combine our current taxes and apply them to a broader scale or not. :D

62 replies

by charliespencer

What's PST and GST, and how do they differ from the HST?

The only national sales tax I'm aware of in the US is the one on gasoline, so the terms you're using are unfamiliar to me (and I suspect to most of us on the southern side of the border). Each state sets its own sales tax, and they vary from none to 8% or higher, and the items covered or exempted may vary. In some states counties and cities may also add additional sales taxes. We've discussed a national sales tax a couple of times, usually in conjunction with reducing or eliminating the income tax, but nothing has come of it.

by jamesrl

as a replacement for a manufacturers tax. This tax was charged to manufacturers when they sold goods to wholesalers or retailers. It was hidden, but passed on to, end consumers.

The GST is transparent, you pay for it and its visible. Britain has something similar in the Value Added Tax (VAT).

James

by oz_media

Sorry Palmetto I guess I should have been more explicit.

As James said, we used to pay a manufacturing tax that was hidden into the cost of goods, it was an 11% tax called FST (Federal Sales Tax). When they introduced GST (Goods and Services Tax) people were in an uproar, not understanding that FST had been charged/included all along, as it wasn't added at the point of sale but included in the base price.

So when manufacturer's passed on the FST savings, base prices did drop and then they added 6% GST (I think it was at 6% at the time) at the point of sale instead. It was shown that Canadians prefer to see taxes added at the point of sale so they can see just how much tax they are paying, hidden or included taxes are just too hard to keep track of.

GST was actually reduced a point since then and now sits at 5%, which is charged in addition to a Provincial Sales Tax (PST) which in BC is at 7%. So a $1.00 price tag costs $1.07 with PST and if it is applicable an additional 5% GST is added, bringing the cost to $1.12.

With the previous system, the item would have cost $1.11 to begin with as it included 11& FST, and the 7% PST was added at the point of sale bringing it to $ 1.17 .

So the newer system actually saves you that 5 cents, theoretically.

This is what brings me to also question supporting the recent HST tax (despite the fact that it's an NDP-New Democratic Party action to stop it).

by deadly ernest

sort of costing within a business, I can tell you what will happen.

1. Tax is brought into law - long term it probably is good, no change in the short term.

2. This work currently done and checked by staff can be fully automated and reduce staff needs in overhead areas.

3. No changes to product prices.

4. Over a period of months or years staff adjustments will be made through natural attrition or job transfers in most companies, some will lay people off - a small number.

5. Once the staff savings are generated the next couple of minor price increases will not occur as they're absorbed through the staff savings.

From a business operational viewpoint a flat across the board tax rate on all goods and services is a damn sight easier and cheaper to manage. Also easier for people to handle.

by oz_media

With our transaction fees they are processing fees added by the banks for using what is now already a fully automated system.

A change for the retailer is simply a change in the POS software.

by deadly ernest

You said:

"A change for the retailer is simply a change in the POS software."

Many small to medium businesses don't have strong POS software that can do that.

However, with or without such software it still requires the paperwork for the purchasing invoices to be properly checked, coded, and filed for the different tax rates on the items as they come in - this is to meet accounting, auditing, and tax requirements. All this requirements staff time to process and file.

by jamesrl

We are going through the same thing in Ontario.

Here is the short history lesson. :)

Most provinces have had for some time a provincial sales tax - on goods (not services).

The GST is a federal tax which taxes both goods and specific services, came about in late 80s.

Some provinces chose at the beginning of the GST implementation to "harmonize" the two. Which means every time one of the taxes would apply, both would apply in a combined rate (8 % PST + 6 % GST= 14% HST). For merchants who charge both taxes already, this is good - one less piece of paper/bank deposit/transfer per month as the HST goes to the feds, who then forward on the provinces share.

But for businesses who charge only one of those taxes today (mostly services who charge GST only), now their customers are faced with paying more tax.

Of course the best situation is Alberta, they have no provincial sales tax.

While those companies who pay both today will have some savings in administration, I doubt we consumers will ever see them.

For people buying new houses in Ontario, they just got 6% more expensive with the HST. Which is a bad thing in this market.

I can see why the provincial governments want this, they have less admin and more revenue. But we taxpayers just got an increase. Ask your lawyer friends how they feel, their fees will increase.

James

by oz_media

It will be applied to areas where GST or PST were inapplicable before.

Also with almost my entire client base being PST exempt, HSt would send them reeling. Some low end manufacturer's have already started going direct to teh installer, and I think other installers will be seeking such US based offers as American companies target Canadian business owners to deal manufacturer direct. Of course you lose most of your support and availability that way, but money is the only motivator for some of these guys who don't believe in supporting their work anyway.

by slayer_

Normally your refunded GST if your reselling stuff.

How does this work now?

This just gives me more reason to hate the liberals. We need more people throwing more pies at them!

by jck

firing rock-filled potato cannons at them.

Pies = waste of good food. :^0

by slayer_

It was priceless when Chretien got pied. I think that guy deserved a medal, not jail time.

by jck

Assaulting someone with a pie is horrendus enough to keep someone locked up.

But, they will free drug dealers and other criminals.

Oh well. No one ever said that government would make sense.

by oz_media

Chretien was no push over, he was a pretty normal and grounded Canadian as far as his public demeanor was concerned. It was the police that had something to prove as they had slipped up by letting the guy get that close to begin with,

[i]"In classic Chretien style, he later dismissed the creamy mess, joking that P.E.I. had developed "a funny way of serving pies." [/i]

? While the prime minister took a pie in the face, the incident gave the RCMP something of a black eye. As we hear in this clip, it was not the first time the prime minister's security detail missed their man. In 1995, an armed intruder made it all the way to the Chr?tiens' bedroom door at 24 Sussex Drive before he was nabbed by the Mounties. Just a few months later, an anti-poverty protestor got too close to the prime minister and was introduced to Jean Chr?tien's famed "Shawinigan handshake." (that's the incident where Chretien grabed the guy by the throat)

[i]After the pie incident, police grabbed the defiant solo protestor within seconds and charged 23-year-old Evan Brown with assault. Brown was convicted and sentenced to 30 days in jail. [b]In the end, he served only eight days after a higher court said the original penalty was too stiff.[/i][/b]

All this rot about locking up people for throwing pies and letting drug dealers run free is pure crap. Drug dealers are locked up, drug users are not.

We actually recognize a difference in drugs, selling marijuana in reasonable amounts is not an offense someone should be locked up for. There is probably 5 people on my street that would sell marjiuana, all hard working and respectable people with nice homes in a nice neighbourhood, they aren't pushers bu any means, in fact MOST neighbourhoods are teh same that way.

Selling smack or crack is not exactly the same and those people DO face lengthy jail terms, especially when they are mainly extradited [i]back[/i] to the US for sentencing.

by oz_media

We had more than one issue with Chretien choking some reporter or someone asking a dumb question.

The pie issue began with agroup that calls themselves The Pie Brigade, they are not the only ones to do it though. throwing a pie at a politician is not excercisng freedom of speech, it is a physical action not a peaceful one and anyone doing such should expect arrest.

The video: http://www.youtube.com/watch?v=Afp9H1tLmro

In contrast, what do you think would happen if someone threw a pie in Obama's face or Bush's face? Armageddon would be most likely, with people all over the US calling for the chair?

Pie incidents:
http://www.cbc.ca/news/story/2000/08/16/peiChretienPie16aug00.html

http://www.bloomberg.com/apps/news?pid=20601082&sid=agsgTjFvFG_c

by john.a.wills

NDP, I think, stands for New Democratic Party, so in a sense they are indeed "Canada's Democrats", but the expression is misleading. The NDP is in the Socialist International, or was the last time I heard, so it would be better to call them "Canada's Socialists". The U.S. Democratic Party is in neither the Socialist International, nor the Liberal International, nor the International Union of Democrats (of which the GOP is a member).

by oz_media

Not to be confused with the old Social Credit party though.

Th NDP is a lot more centered than the Socreds were, they sit left but are more of a left/centre democratic party by action.

One thing that is vastly different between US and Canadian political parties.

In the US, the two major parties are extreme left vs extreme right.

They create and depend upon a strong division of people who are either staunchly left or right. They go out of their way to ensure they are absolute opposites with no middle or reasoned ground between them, as we see displayed by the supporters of each side. Left will discount ANYTHING the right says just because the right said it, and vice versa.

In Canada, the people are MUCH more centre focused, where neither extreme left or right is really acceptable. Thus our parties are all very closely aligned to the centre in order to garner greater support based on their actual individual actions instead of just pure opposition for the sake of opposition.

Canada's Conservative right will campaign very similarly to the Liberal centre or democratic left, as they all seek to share middle ground and gain more votes based on their approach to the same issues.

This differs in the US too,, as they will ensure that they oppose such issues simply because the other supports it and it is either be far left or far right, with no common ground in between.

Such opposing action in Canada would lose an election instantly, they need to be very similar but slightly different in their solutions here.

by jamesrl

The New Democratic Party is considering dropping the New from their name. Considering the moved from the Commonwealth Cooperative Federation (CCF) in the early 60s, they aren't really new. Or they like the traction the Democrats in the US have.

The NDP are certainly the most "socialist" of the Canadian parties. They have never been in power Federally, and had been in third place for a long time, until the Bloc Quebecios(separatiste) party came along.

But probably most instructive is how they act in power in the provinces. They don't go around buying up business, eliminating private property. In fact some NDP provincial governments have done an admirable job in cutting taxes and reducing provincial deficits.

The NDP is, like the US Democrats, closely aligned with the unions, though one huge union (CAW) broke from the party before the last election. Their former leader actually ran as a Liberal (and lost). There have been a few people move from one party to the other.

The NDP may be a member of the Socialist International, and there are some more left wing members of the NDP who really feel strongly about that, but the mainstream of the NDP isn't that comfortable with it.

James

by darryl~

I read through the thread real quick & saw a couple things people were wondering about.

In the retail industry or as a business owner, you still submit & claim your GST if your business exceeds $30K income per year.

The Liberals, Conservatives, & now NDP have all had a hand in how the HST is applied to various goods. The Liberals removed the PST portion of the HST on home heating fuel & electricity....the Conservatives put it back on & removed the PST on electricty over a "magical" amount spent per year....the NDP say they are going to remove it again.

I don't even bother listening to any of them any more....they're all the same.

Then you get into gas, alcohol & tobacco taxes...the HST is added after those taxes so you're being taxed on a tax...where before, the FST was built into the price.

NS has been doing the HST thing for years....I remember it well when it was brought in here....everything, I mean EVERYTHING went up in price....it will be the same for you other provinces that choose to follow the same route.

by oz_media

That's been a point I've been trying to explain to our US neighours for years now, one which seems to fall upin deaf ears.

Canadians, for the vast majority, are not politically focused, that's why I found this topic actually interesting for once. A political topic that Canadians actually are discussing, it doesn't mean that Canadians really feel any particular party is any better than another and that we see all politicians as crooks worth ignoring for the most part.

This was actually brought up by someone that has no political insterst at all, I don't even think she's EVER voted. However the Internet has brought about this peition and it seems Canadians are now focused on a single issue and not understanding what the NDP has done in BC in the past.

by darryl~

it's only relevant to the provinces which don't already have HST....those of us that already have it....well...we're stuck with it...no party is going to scrap it....they may change it a bit here & there...but that's all.

You want to see some fireworks.....wait until they try to put a PST in Alberta.....there's been talk about that lately.....can't wait to see the show :D

by charliespencer

I've got a minor interest in how other governments are organized, and how their processes differ from the US.

by oz_media

I know it has been proposed but with Alberta being so prosperous, though that has slowed somewhat in recent years, I can't see it coming to fruition any time soon.

Yes it is a provincial thing at this time but that involves Canadians, Canadians who do not normally give toss what politicians do, I think they are just interested now due to the Internet coverage.

by oz_media

In NS did you only have PST on top of the old FST that was already included in the price, or did you guys ditch FST and go PST + GST before them combining into HST?

I was new to the country when I lived there and really don't remember how the sales taxes were applied.

If you went from plain sales tax to HST I can see why you owuld see a great price difference, only SOME companies actually compensated for teh lack of FST when that was ditched, meaning all your costs went up another 7% when HST was introduced.

In BC, most companies dropped the 11% FST so prices actually went down a bit when GST +PST was introduced. So the change to HST would only change pricing by 1 or 2 points, resulting in a very minor change.

I have interests both at the retail level as well as teh wholesame/manufacturer level in this so I am really on the fence but have a real problem supporting the NDP since I am no longer in a union and make pretty good coin these days.

by darryl~

We had PST + GST for the first few years...I was a retail manager at the time of the switch....collecting/calculating the 2 was a real pain...especially keeping track of what items were GST exempt (no bar code scanners back then).

Yes, the biggest change was from the change from FST to GST as that's when the majority of tax on a tax began....the FST was on the cost of goods to be manufactured & was added to the cost to purchase at that level, the same as tobacco taxes, alcohol taxes, etc., the GST was applied after the tobacco, alcohol, etc. taxes so in effect, we started paying GST on thoses taxes...thus, a tax on a tax. In addition....not all items had 3.5% FST some were lower & some even 0% & some were higher, so yes, those items increased by 7%. I don't recall anything being as high as 11% FST...that may be a reflection of after the retail markup was applied...if I marked an item up 300%, the FST would in effect be 10.5%...at Radio Shack, some items had very high markup....C, D, 9V cells for would be in the 400% range for example...those items went down in price with the GST because the markup was no longer applied to the FST.

The biggest problem with the HST is that they start applying PST to EVERYTHING...no, some of the governments in Nova Scotia have tried to address this over the years by offering tax credits, etc....BUT...they tend to base it on income level and it's usually only the people below the poverty level that qualify.

There are many items that are currently exempt from GST in BC & various items that don't have GST but have duties (another form of tax....it's just directed at imports)....be prepared to pay an additional 7% for those items. This also hurts the foreign manufacturers as it applies an additional 7% to the duty they are already paying....it doesn't cost them out of pocket, it costs them in sales as the cost of their product increases & becomes less competitive.....there's ALWAYS a hidden agenda when it comes to politicians.

by oz_media

couldn't be more true, every politician is in it for himself and his cabinet. "look hwo much money we raked in while I was in office!"

FST used to be applied to all manufactured good entering or made within Canada, it was not applied by the retailer it was applied at the wholesale level, 11% federal Sales Tax right across the board that was hidden into pricing. This was a national tax that everyone paid on everything.

I worked the wholesale distribution market, at that time selling forklifts, loading bays, warehouse rackign etc. The people I sold to, retail and warehousing, didn't pay that as an additional tac it was just added to the base price and wasn't a declarable tax, as in a tax added at the bottom of an invoice like PST. If they were PST exempt, they'd save that 7% but the 11% was still included in the price of the goods. This is why it wouldn't show up on the retail end for you.

When they introduced GST, the FST was removed form the price of goods and GST is only applicable to some items, as you've noted. PST and GST are calculated based on the sticke rprice of the goods, GST is not applied ATFER GST but is calculated based on the price withotu GST.

Now, with the increase from 7% PST and 5% GST will become 14% HST. So there should only be a difference of 2% at most for those who don't absorb the 2%-3% savings in banking fees.

One issue I don't like, as you've also noted, is the application of HST being a blanket tax. We have a similar problem already with GST though.

When it was first introduced, retailers didn't know what was ot be taxed and what wasn't, especially in out Indian, Korean, Chinese, Japanese etc. communities, where they were unable to fully understand teh guidelines.

You used to walk into stores and they would tax you on a 1/2L of milk but not a 4Ljug, which was right but then some stores would charge GST on ALL milk etc.

After a while consumers, including myself of ocurse, stopped paying attention to what goods were taxed and which weren't, it's just too much hassle to argue with someone who doesn't speak English very well over a few cents when you need milk.

GST rebates are only available if you earn under $40,000/yr (or just under actually).

Those rebates were around $80.00 per person paid quarterly. It was seen as mainly as a beer and dope rebate by those who received it. Every 4 months the government would send out a check for a case of beer and a bag of dope to all lower income Canadians. LOL :D

I think there will be a slight increase on some goods and others that were not GST applicable will see a greater increase. In the end though it's just tax, we pay it if we want to live in Canada, and it's impossible to escape anywhere else, unless you live in the Virgin Islands of course.

I don't really worry abotu taxes, nor do I complain aout paying them. Taxes are a way of life, if they increase taxes so much that i can't afford to live my life as I choose, I'll just have to make more money to overcome it.

by fregeus

But then again, we're "SPECIAL" here in Quebec. We never do thing like everybody else. We always find a way to make it worst.

I don't know how the taxes are applied in the other provinces, but I know that here, in Qc, the PST (provincial sales tax) is changed after the GST (goods and services tax). So basically, we pay provincial tax on the federal tax. Gotta love the Quebec government.

Like I said, I haven't heard anything, but knowing my provincial government, they won't go for it, simply because it does not advantage them to do so.

GET ME OUTTA HERE!!!!

TCB

by oz_media

GST is only paid on certain items, as is PST.

With HST, it will be applid to EVERY purchase, whether a service, food, manufactured product etc. So the government makes more dough. What else is new?

I am more ocncerned about ensurign teh low pressure front doesn't coem in too late fo rteh high pressure heading West to stop it in time. A hot sunnt weekdn in Whistle ris all I want.

This was an excercise in curiosity, James is our house representative for Canadian political motives, that way we don't have to think about it, so I was really looking to pick his brain.

I'm not suggesting your or others comments aren't welcome and appeciated, its quite the opposite, but I merely meant that JamesRL would cast a little reality on things.

Darryl's input is rather interesting too, I just wonder if they replaced existing taxes or what?

Thanks for your post TCB

by pygar

For the truely small business this will require the cost of calling in a service tech to change your cash register setup. For next level up (most organized businesses)this will simply be covered by a change to the ubiquitous POS system.

After working for years in the retail and restaurant business as a tech specialist, there are so few serious businesses out there without some kind of POS that the front-end is not an issue of tax calculation. Do you really think your local corner store diner calculates tax on your bill???

As for the inventory side, the small to medium size businesses do not determine tax rates on individual items, they do this at the 'department' level, so there is no arduous process which will be eliminated resulting in this proposed decrease in overhead.

The big question here is: Do you think it's time to start charging a percentage of increased tax on certain businesses?

In BC we don't charge both PST and GST on everything. That is where the difference will occur in the long run and where the added money will come from for the government coffers.

by oz_media

I have seen people who don't read or speak English quickly reprogram their casio registers. most small businesses pick up a POS system at COSCO these days, even teh more rudimentary Casio system is simplo to reprogram. If anythign it is the larger companies that would call in a tech, I sued to go out to clients and reprogram them for free when I was in the aream it takes MERE MOMENTS.

I know you were agreeing with the ease of change, but it's even easier than that.

by deadly ernest

Most small to medium businesses down here don't have departments to do things at the department level - the person or persons doing the accounts have to note on each invoice against each item what the appropriate tax rate is when it comes in and when it goes out - this is calculated and costed on each item. By determine I mean they look at the item, which government rate list it's on, and then note the rate against it; under the old Sales Tax system they often had to work out what USE the item was before they could determine the rate as some items could be charged at different rates depending upon the usage.

When we switched from a dozen different rates of Sales Tax to two rates of GST it became a lot easier, but would have been easier still at the flat rate the government proposed but had to compromise on to get the legislation passed.

Many small businesses down here still have old style cash registers without a true POS system. While the big companies will just have someone with the proper training make an adjustment in the software for their systems.

by oz_media

I sold POS systems to everyone from teh rinky dinnk mom & Pop operation to Telus and Bell Canada retail outlets.

even teh absolute, most basic POS system/software allows for almost instantaneous changes to taxation.

Even those still using QuickBooks have a simple singlel digit to change the entire system

Perhaps, in the outback, some aboriginal with an abacus made from shells would have ot rethink hsi alculations, ut in the real world that's not teh case. We've had sveral taxation changes in the last few years and I have yet to hear of anyone unale to quickly ake such changes.

Why do you even make up these baseless arguments simply to support a point that is unsubstantiated?

'well what if the guy has only one eye and no fingers? not so easy for him huh? Told you!'

Try for a rational, supported and worthy argument one day.

by deadly ernest

small businesses do NOT use a POS system. Most still have basic cash registers, some are a decade or more old. A lot of people seem to forget Australia is a niche market on the world stage, just over 20 million people spread over an area almost the size of continental USA. Very few small businesses down here get enough business to justify good equipment.

by oz_media

I've done Australia a few times, to visit friends, to meet with acts, on tour with acts and with a firend for a wild week getaway.

YOU are trygin once again to pull SOME shred of truth out of what was an incorrect comment AGAIN as you constantly make such comments and grasp at any irrelevant straw you can find ot justify your comment.

I was speaking specifically of Canada. You instantly argued my point, trying to correct me on my assertion that it was a simple change.

When I explain further that is IS a simple change, as well as someone else saying the same, you now pretend you were referring to some bush business in wallabyworld.

I know that much of Australia is very traditional and unevolved in a commercial sense, that's one of teh things I like when gettign away from teh city there.

But that was neithter the focus of my initial comments nor the focus of your quick retort.

"Australia, Australia, Australia, we love you, we love you, Amen."

"Now, you don't mind me calling you Bruce just to keep things simple do you?"

by darryl~

the rest of Canada when it comes to automation at the retail level. Over 50% of our corner stores still use the "old cash register system" which you spoke of earlier. A few restaurants still do hand written bills but most rely upon a cash register to calculate the taxes for them before hand writing the bill for the customer...all restaurants in hotels, etc. along with the fast food places have a POS. Most all retail stores have a POS. I was working at Radio Shack in the mid 80's when they finally switched to a POS & we were one of the last in our mall to do so....and Radio Shack did the whole country at the same time so the stores in Ontario & out west were very far behind their competitors at that time.

It would appear that your observation/comment about the lack of business/$$$ is indeed quite true if many in your area are over 20 years behind us in Atlantic Canada.

We have been catching up to the rest of Canada & the USA over the past few years but it's mostly in "pockets" here & there....some cities are very good, like Moncton, New Brunswick...but many are still stuck in the past....I'm lucky as my area is on the higher end of the scale....but I don't have to travel very far before I start seeing "hand written" slips or store that use a calculator to calculate the taxes.

by deadly ernest

1. Initial post opens up with a comment about change to sales tax proposals stating:

"Foro those of you who aren't aware, Canada's Liberal party is seekign to impose a Harmonized Sales Tax on ALL goods, of 12%, as opposed to the PST and GST we pay on select goods now."

And follows with comments about price drops and costs balancing out.

2. I comment on the balancing out and price dropping due to the changes to tax laws, setting out what usually happens in such situations.

3. You reply with a comment on bank processing fees and a blanket statement that EVERY retailer has a POS and will simply adjust that.

4. I accept your comment on the bank fees and comment on the statement on POS and state not all businesses will have them and they still have to process the inwards invoices through accounting processes that check and code the taxes to the right accounts at their various rates needing staff time.

5. You then respond with a reassertion EVERYBODY has a POS and uses accounting software like Quickbooks requiring only a one line adjustment. You then make derogatory comments on Australians and the use of POS except in the far outback, and making tax changes being easy. Then attack me about my argument being baseless.

6. I reassert that not all businesses have a POS, and respond about the situation here in Australia since you raised the application of POS in Australia, pointing out situations where people do not have POS and how common that is in not large market areas.

7. You then comment on visiting Australia, then make more personal comments, and state this is about Canada, not Australia.

8. I detail some of my experiences here and reassert that not all small businesses will have a POS and that taxes paid and collected will still have to be tracked in the accounting systems.

9. Darryl points out that many of my comments about small business operations are also valid for Canada, based on his observations there.

10. You then jump in about my observations on Aust POS systems having no bearing on events in Canada.

11. I point out my initial comment was on how businesses operate, regardless of where.

........

In all this I've never said the business won't make the changes on time. I've not made any comment on how the banks handle their side. And you've not addresses any of the points I made in my initial post, simply stated EVERYONE has a POS and will easily adjust that, then attacked almost everything I've said since as you moved the sub-sub-thread discussion away from my initial comments by focusing on the POS and then Australia.

Since you seem to sincerely believe there is more being said in the posts than is in the words on the page, I don't see much point in responding further on this sub-sub-thread because my initial comments still stand unchallenged and my comments on small operators not using a POS have been substantiated by another person in Canada and my comments on accounting processing stand unchallenged.

Have fun with your local politicians.

by darryl~

My memory was failing me....The GST replaced a hidden 13.5% Manufacturers' Sales Tax (MST), for some reason I thought it was 3.5%...I missed that other 10% :), and yes, I was fully aware of it at the time as it showed on my expense summaries, inventory levels, etc.

In addition, the GST also replaced the Federal Telecommunications Tax of 11%....so you had them a little confused as well....but considering it was almost 20 years ago, I guess we can be forgiven...see the below link for more info regarding it.

http://tinyurl.com/7chog

And way back when they frist brought in the GST....some provinces applied the GST & then applied the PST to the total of the purchase price + GST & others did it as you stated by calculating the PST & GST on the purchase price only. It made a real mess of things in the retail industry.....have a look at the following link....

http://tinyurl.com/n2xg3h

I think you'll find some interesting stuff in there that maybe you weren't aware of as this was all happening when you first moved to Canada...for instance, the HST was initially called the BST (blended sales tax)....then everyone started calling it the Bull Sh*t Tax....didn't take them long to change it to the HST :D

Do some research on Nova Scotia's history of implementing the HST & you'll soon discover what is in store for you.....you won't like it.

Yeah, the GST rebates are a joke...I've only ever qualified for them a couple years....they come every 3 months...Jan, Apr, Jul, Oct & they also calculate in the number dependents you have to determine the amount...I think it starts a little under $50 per quarter & maxes out around $170....I'm not sure of the top level.

You'll like this...in NS they apply the HST to "some" food products purchased at a grocery store....things that are "prepared" & ready to consume....same as if it was a meal at a restaurant or fast food joint (didn't they tell you? you'll be paying HST on that as well)....thought you'd like that one :D

I really think the rest of Canada should research what has taken place in Atlantic Canada before moving towards "blending" the current taxes.

edited to fix link

by oz_media

GST issues are the same as HST only beign applied to certain food items, as I described earlier.

I worked for a company with BAD computers?!

In '86 I worked on some goofy green text computer system where, "DID YOU INCLUDE FEDERAL SALES TAX" was prompted before completing all transactions. FST was 11%, which we added at the wholesale side so end users were not aware of it.

Again though, I REALLY REALLY don't care too much about taxes, a few points here and thereis not enough to gain my support for a government i don't trust. Sure they'll knock 3% off but wel will pay dearly in other areas, like reduced trade.

I walk a fine line when it comes to our resources, I understand that it is imperatice as a province that oru resources are farmed "RESPONSIBLY' however the NDP just want ti shut the world down from trade, while at the same time they play the percentage game with unions and logging companies that reap our resources.

In the end, WE can't farm our resources, but US companies get eth government to bend over and THEY take over and literally rape our forests and streams clean. I know it, I've seen it, been surrounded by it an know the people from US owned companies that moved here for work and the Canadians that no longer HAVE work due to it.

So my whole feeling is not to protect everything we have, not to waste what we have but create sustainable alternatives, as has been proven possible in European nations with far fewer resources to begin with!

by deadly ernest

on this are from actual work experience and observed facts while out shopping. Small local stores here do NOT operate the same as the bigger stores - and this is more so once you get outside the few major cities.

There are over a dozen or more restaurants in town and the nearest city (40 km away), of the six or so I use only one (a major franchise store) has a POS system, the rest use a calculator and an old hand till to calculate the bill. The same for many of the take away food stores, the bakeries, the two clothing stores in town, the various hairdressers I'm used here in the last several years, the local video store. In this town itself the only places I know of that use a POS system are the big supermarket, the Post Office, and the chemist, the electrical goods store is getting one soon.

When I lived in Sydney and Canberra (up to late 2003) take away food stores, newsagents, small local family run corner grocery stores, bakeries, and many other mom and pop type operations did NOT use POS systems at all as they can't afford them.

As for larger businesses, operations with small retail operations don't use a POS system either as they aren't worth the expense when the majority of revenue is from wholesale sales or services invoices. Yet all need to track the tax paid and the tax collected on all transactions in and out.

by darryl~

there was never an FST in Canada; however, there was an FTT (Federal Telecommunications Tax) which was 11%....what you are calling the FST (Federal Sales Tax) did not exist in Canada....we had the MST (Manufacturers' Sales Tax).....you must be confusing Canada with the USA (notice I put an "A" there)....maybe the person that installed the "goofy green text computer system" was from the USA and thought it was easier to explain to the "emigrants" of this wonderful country us natives like to call Canada that the MST is a "federal tax"....you must have been too busy with all your other studies at the time to bother with International Economics.

As for developing "green" resources....well, I'm with ya there!! I AM the "poster child"....PurpleSkys also!!

I spent 3 years roaming the "back woods" of Atlantic Canada installing & maintaining the electronics on "test towers" (things the wind developers have to put up to ensure it's feasible before spending a few million $$ to put up a wind farm)....what have you done Oz? My brother-in-law was one of the head engineers (yeah, that's right...there are more than one) that built the tidal power generator we have down in the Annapolis Valley in The Bay of Fundy (http://www.planetware.com/annapolis-royal/tidal-power-station-cdn-ns-nsarp.htm)...but I'm sure you've done something like that somewhere else (and even better) Oz....you always have.

Really Oz....stop trying to change the subject once you realize you have no idea what you're talking about and try to accept the fact that you "only know what you know"...I know better than going outside my boundaries of knowledge....you just make yourself look silly in the eyes of your peers....maybe you don't care, I don't know....but I just thought someone should tell you that.

Maybe you'll become a more pleasant person to discuss things with in the future.

by oz_media

Once again, this is the third time now I think, I am talking about a specifc tax being added in a specific province half a world away from you. Can you not see the irrelevance in comments about Australian POS systems?

As for your first hand experience, does it extend into Canada?

by oz_media

First off I have no idea what you are talking about as far as starting a pi$$ing contest regarding your time working with environmental issues.

I merely said that I have lived within and been surrounded by the issues we have right here in BC with respect to forestry and fisheries. I have no clue why you would take such a defensive stand and start on about wind farms. You have obviously read something I said the wrong way. When I lived in the Island, I lived in an forestry town where American companies had just put two large, Canadian, unionized companies out of business due to the fact that the Canadian companies were heavily restricted to loggable territory. The US companies played the government on the free trade card and opened up shop while the government opened up several thousand hectares of land that Canadian companies had fought unsuccessfully to log for years...if THAT'S what you are referring to.

As far as FST, I have discussed it with James before also and he was quite aware of it, as are any business I approach for trade.

I don't deny that there was a FMT tax, I am referring to working for three years in an organization where FST was a standard manufacturing tax. By the time it hit the end user, it was included in the selling price.

When GST replaced FST, the cost of manufactured good dropped for most and the smaller tax was applied at the point of sale.

I don't know why you take such defense to that, it's a part of my employment that I lived day to day with for a couple of years.

As for the rest of it, whetever. I have been extremely polite and forthright with you, I have appreciated your input in the conversation and haven't really disagreed with you at all. I am simply stating the way things are/were here.

A US company setting up our systems and spelling the tax code wrong? Where do you dream this stuff up?

As for environmental issues, I have worked in forestry rejuvenation projects, counting and plannign regrowth in BC. I once started a firm that was government funded to go through BC and repair/reroute trails and footpaths that were damaging our streams and natural run offs. I have worked with fish hatcheries designed proposals that illustrate sustainable fishing on the west coast too. So I do have a very good grasp of the specific industries that I was referring to, no we don't have wind farms in BC, we generate hydro electricity, however I didn't claim to have any experience in that field eiher, I really don't know why your overly defensive rant was derived from but it was from way out in left field somewhere.

I haven't argued ANYONE's point here actually, besides reminding Deadly Ernest that his comments regarding Australian small businesses lacking POS systems doesn't apply to the West Coast of canada.

If you feel otherwise I accept your rejection of my comments and leave you to feel whatever you think I said instead, whether a personal attack that you need to defend for some reason or whatever.

[b]EDIT:[/b] Here you go, The Kingston Brewery ran a brewpub who ended up in court for NOT paying FST Federal Sales Tax on the beer they served in the late 80's, they were considered a nonexempt manufacturer.

http://www.citt-tcce.gc.ca/appeals/decision/ap93073_e.asp#I2

[b][i]The appellant was assessed $19,960.24 for unpaid taxes, $4,001.86 for penalty and $7,446.75 for interest on the basis that its sales exceeded $50,000 in each year and that it was, therefore, liable to pay federal sales tax.[/i][/b]

Of course, in that court document, they meant to say FMT and are just not up to speed on wind farms I suppose.

do a little digging and you'll find that PEI actually still charges a FST.

[b]Google Books - The Politics of Taxation from Charter to Martin[/b]
(can't copy the text from the page as it is an image. Describes GST's inception)

http://tinyurl.com/no4wlr
It was a long URL so I shortened it.

[b]"The idea of replacing the Federal sales Tax had been raised as early as the 1956 report..."[/b]

And you are telling me I am full of it and don't know what I'm talking about and yada-yada-yada?

by deadly ernest

comments on how businesses operate. The general operational procedures of businesses around the world are much the same, so the comments were, and still are, valid.

You then made a comment that my post wasn't relevant as EVERYONE would simply adjust their POS. I responded with a post pointing out that not everyone uses a POS, to which you objected and said they did. We then wandered down that path where I pointed out that was not the case around here or most of Australia. You said I was wrong, then Daryl pointed out he's seen in Canada the same points I made about small businesses around here.

The fact the change will take place in Canada does NOT invalidate how many businesses will deal with the issue raised, they will still make adjustments in the same manner as stated, such adjustments varying with their current operating procedures as per my original post.

Some savings will likely occur from the change if it's as flat as indicated, but they won't be seen for some time in most case.

by oz_media

I'm not going ot keep doing this with you, you are always on some tangent and don't keep focus on the issue.

>I stated that retailers currently pay 2-3% in banking fees to process individual taxes. An HST would remove that operating cost and stores would most likely pass it on, just as they did when FST was ditched for GST.

>You stated that retailers would still incur costs to reorganize their business expenses (of course a one time cost)

>I commented that MOST retailers, in fact almost all here, have a POS system to make such lanket changes withotu adjusting individual item pricing

>You commented that most small business don't use a POS system

>Having worked in the local industry for several years, evaluating needs, designing and selling POS systems at the wholesale level for resale to businesses of all sizes, I disagreed.

>You then started on about small businesses in Australia, of course completely irrelevant to the topic at hand. I am and always have been discussing a specific tax being applied in a specific place.

You've gone astray

by darryl~

Yes....I agree it was a "federal sales tax"....it was called the MST (Manufactures Sales Tax)....it was 13.5%...not 11%....you seemed to take offence when I suggesed you were incorrect about the "name" & totally ignored my original comment about me thinking it was 3.5% & not 11%....the FTT was 11% back then....you mixed them up also....that's all I was trying to tell you....get over it.

You're the one that went off on a tangent talking about environmental issues....I just gave you my thoughts about it....again...get over it.

As for researching PEI's tax history....good!!! That's what I suggested...I said research Atlantic Canada's history regarding the HST....PEI is a little different than NS, NB, & NF but the 3 of us effect them quite a bit because our economies are larger than theirs. Now that you started looking into Atlantic Canada, check out the rest.....Like I said before....you're not going to like what you see. And yes, the USA plays into it a lot, the Northeastern States rely upon Atlantic Canada as much as we rely upon them....the "trade crap" that is going on between the central & western states & provinces is hurting us....but you see, ME, NB, NS, NH, & NL just don't have the population or # of political seats in our respective countries' government to make any difference or have a say.....that's how we got "steamrolled" into the HST....don't let it happen out west....you'll be sorry.

I think we're beating a dead horse here.....we should let it die.

Edited for....However, I also recall it being comonnaly referred to as the FST on various inventory listings I had back then....and I think Radio Shack even had a form that I had to fill out when selleng goods to a manufacturer so they could claim the "FST"....but if you read through the whole thing, it was identified as the Manufacturers Sales Tax.....it's not really a big deal.....my point is that it was 13.5%....not 11%

by darryl~

That's spelled Darryl....2 r's ;) I spell it the same as Darryl Sittler...not Daryl Hannah....she is very cute but I don't think she can handle a hockey puck like Darryl (or at least not on the ice without getting a penlaty) :D

And I thought what you mentioned about the POS in rural areas was appropriate....whether it be CA, AU, or US....still relevant.

by oz_media

you're right.

As for FST, in 1987-1988 there is absolutely nho question in my mind whatsoever, it was 11% FST charged on manufactured good sold in British Columbia. I have the reciept still, this is 150% certainty, no question, no links from anyone required. It is highly possibly that at some point in time that was different, as illustrated in the link I provided you.

Was it 13% MST for you when you worked at Radio Shack? Why not, I didn't question that.

I also have no question at all that it was 11% FST at the time I cited aove in British Columia.

by darryl~

I'm very used to my name being spelled wrong...I was just poking fun at you :)

There are many ways to spell my name & I usually surprised when people I've just met spell it correct without me telling them first...I usually get "Darrell". The one that always makes me laugh is "Darrly"....I'm not even sure how you would pronounce that....I had a Prof when I took my Electronics 30 yrs ago that always spelled it that way....never could get him to change.

My best friend's last name is Ernest....he gets Earnest a lot....I'm you do as well.

by deadly ernest

embarrassing for me than you realise as the way you spell your name is the way I normally spell it it's the same as my favourite nephew's name. And yes I get my name misspelled a lot, even the surname gets extra letter sin it - e, u, and s being the most common ones.

by oz_media

Ernest, I have sold POS systems to companis that resell in teh smallest town to the the tiniest little tin pot businesses you could possibly imagine. In BC, I have been to all corners, WEE little towns of a few hundred people or less, where the gas station runs a small pump that sits on top of a barrel of gas, the tiny store offers liquor (as an agent) and a few groceries, that store being the back of someone's rustic home on Quadra Island, a TINY little island on the Sunshine Coast coast. I have been to lakeside "shops' that consist of a part of someone's house converted into a general store that can only be accessed by float plane as there are no roads into the lake, even THESE people have POS systems for Christ's sake.

A POS system these days costs less that $300.00 for a small business to implement and saves them time and money as well as tracking what tiny bit of inventory they have.

A POS system can be as simple as an electronic cash register bought from Costco for $245.00!

Bar coding and scanners are not the only type of POS system available but even a full POS system with a cheap scanner costing less than $125.00 and Label/barcoding system costing $275.00 a printer worth $250.00, anything that allows a user to ring in an item, stores and allows the user to manipulate sales data is a full fledged point of sale system.

I've sold millions of dollars worth of POS systems from coast to coast in Canada, it is a MASSIVE industry here, with even small POS resellers conducting several million in business each month, to companies of AL sizes.

This was also specifically a comment about British Columbia adopting HST, a little Googling will illustrate this is exactly where the tax I am discussing is to be implemented in 2010.

I'm sorry for not being more comprehensive, I though you would have figured out I am not talking about Eastern Canada nor Australia. Again HST is only being proposed in BC right now, and that's the issue at hand, not global market penetration of POS hardware.

But I promise you that MOST, in fact the great vast majority of BC business of ANY size, including small cottage industries run from homes, roadside artisans in tiny towns that barely make the map, are using some form of POS system where taxes can easily be adjusted.

With respect to yoru initial comments, we will NOT see an increase due to costs of reprogramming and adjusting POS systems and mom&pop businesses will not be chargin the same because they track sales and taxes by hand.

My entire point was to illustarate how people currently pay bank processing fees that they will no longer pay. IT has nothing to do with home bookeeping anyway.

It's almost imperative here to have some form of POS system as they have changed GST tax rates a couple of times in the last few years alone.

It DOES happen, when an unsavvy user or foreign user does not understand register reprogramming or something, where they will call in someone to do it but Casio, Posiflex, Micros, Partnertech, Positouch are all the leading POS system providers that generally absorb costs of technicians who are approved to reprogram/sell their systems anyway, I've done it.

I worked as a business development manager at the manufacturing and wholesale distribution end of the market, I've seen the changes implemented efore I've seen the penetration into the marketplace. That's what I was paid to do, understand the market penetration in Western Canada.

Certainly there are some companies that don't use a POS system, but they are VERY few and VERY far between, in fact I haven't seen anyone without one for a long time, in fact I can't even rememer the last time I saw someone that didn't have one, and again, I've been to the tiniest rural communities in the province, some without a road leading into them that use an easily reprogrammable POS system. To even think of running a business here withotu one today just shows a misunderstaindig of business operations.

You can DOWNLOAD open source POS software and install it into your own PC these days,a cheap USB scanner and printer and your good to go, it's not some untouchable market for the rich.

A half decent, working POS system can be implemented for half a welfare check.

by deadly ernest

and easy to install,use,and adjust; I've sold, installed, adjusted, and used many myself. But, not everyone has one or wants one, I've seen that here, and Darryl has seen it in Canada - it's human nature as some people don't like technology or understand it.

Even with the POS handling the calculation at the sale point, you still have to have staff processing the incoming invoices and coding the taxes on them to the right areas as well. If you don't, you get messed up accounts.

..........
On a related issue, further side tracking a bit:

One of the big advantages we were supposed to get several years ago with the introduction of a flat rate across the board 10% Goods and Services Tax replacing a 22.5% to 50% Wholesale Sales Tax, was a much simplified processing of the accounts by businesses. Simply put, all incoming invoices would have 10% GST and all outgoing invoices would have 10% GST - simple adjustment to the accounting software and 1/11th of all purchases and sales for the period is listed as GST. Sadly, despite the party pushing for the tax getting elected, one of the minor parties who are glove puppets for the other major party had control in the Senate and they forced changes that blew away the flat rate on everything by listing a host of items to be totally GST exempt or not pass the legislation. The result was the staff checking the invoices and making sure the tax was listed properly were still needed, no such savings occured, no price reduction or lowering of operating costs.

Some of the small mom and pop operations who do NOT use POS systems handled the matter quite easily, they refuse to carry exempt products. Some lost about 3% of their sales, but it greatly simplified their paperwork.

by oz_media

Sorry to start this one up again but I just got into a conversation that proves I was not getting names mixed up, it was not a poor programmers glitch etc. as you have suggested.

[i]"Yes....I agree it was a "federal sales tax"....it was called the MST (Manufactures Sales Tax)....it was 13.5%...not 11% [/i][b]WRONG IN OUR CASE[/b][/i]....you seemed to take offence when I suggesed you were incorrect about the "name" & totally ignored my original comment about me thinking it was 3.5% & not 11%....the FTT was 11% back then....you mixed them up also[/i][b]WRONG AGAIN, I WAS TALKING SPECIFICALLY ABOUT FST IN BC[/b][i]....that's all I was trying to tell you....get over it."[/i]

And that's all I was trying to explain was incorrect, get over it.

I work for a company that USED to manufacture security alarms. The owner was just talking with a client of mine regarding HST. He was saying they used to charge, [b]FST at a rate of 11%[/b] which was hidden into the price of all manufactured goods they made and sold.

This means that yes it WAS called FST here, and yes it WAS 11%, as I have suggested all along.

However you said I was mixed up and should get over it, I wasn't mixed up I was bang on!

Not worth starting another thread over, so I figured I'd just update it here instead and prove to you that I was not getting mixed up and it was not the result of a programmer not knowing any better.

This is coming from my personal experience selling such product and adding the FST tax on to sales to resellers as well as a completely different manufacturing company saying they did the same at the time.

Are suggesting the business owner who had to manage, calculate and recover those costs was mixed up also, like some form of mass Western Canadian hysteria was in play?

Before you are so sure of yourself, based on what happens in the Maritimes, perhaps check into what others are doing/have done before chastizing them.

by oz_media

I already KNOW.

Also if you Google British Columbia FST 11% yuo will find a document illustrating the tax changes over the years, which also describes FST being applied to manufactured goods being the precursor to GST (the linked I initially posted) which explains how FST WAS 13% and then was lowered as far as 9% over time, with some provinces raising PST to accomodate for the change and recover more taxation.

I suppose in your world, HST will be the sam across Canada too. Wheras we already knoew ours will be at max 12%.

It's not a point of argument, some guy on the East Coast trying to explain to me what I did every single day for two years on the west coast was wrong, because he Googled it is a complete joke. Get real. With respect to FST in BC, you are 100% without ANY question whatsoever WRONG.

I worked in business as a sales manager at the time and know exactly what charges were applied as it was a key marketing point when setting resps targets and building margins.

I was paid based on net profits, how would I NOT know what was added to the net, it was my livlihood for Christ's sake? I calculated all selling prices from a NET + FST and PST, how would I NOT know what the taxes were then?

Another successful business owner who manufactured product at the time says it was 11% FST he still operates the same business today however is no longer manufacturing.

Are you suggesting everyone is wrong and that from working at Radio Shack in Nova Scotia you know better? Give your head a shake man!

Who do you really think you are fooling?
Knowing it first hand because I sold into the marketplace at teh time, hearing it from a business owner who MANUFACTURED at that time and hearing someone also discuss it with that owner that HE agrees the old 11% reduced pricing and HST will be a minor change is good for me.

Someone 6200kms away from that marketplace with experience at a retail level has no voice for me to even consider listenitn to.

As for Radio Shack, they are a retail outlet, perhaps you were adding MST tax on to sales at that time, but the FST I am referring to at 11% was NEVER added by the retailer it was a hidden tax that was eventually ditched to introduce the POS tax GST.

Really though, do you REALLY think I would take your word over personal knowledge as well as knowledge from business owners that operated in the BC market at the same time?

Not bloody likely but you can try all you like, you would simply be wrong though.

by oz_media

YUo make a clear and valid mistake, you call em out on it, you insinuate that I am mixed up and don't know what I'm talking about, I let it rest.

I then hear confirmation that I was indeed correct, I post proof to where that information is also reiterated and yuo say, whatever. How clever!

My little world? Sure beats your imaginary world where you can just dream up arguments and expect them to sit as fact when you have never experienced the market place you were speaking of to begin with.

As for lumping yourself in with others, most people run away and leave atrail of flames when they are proven wrong and have no recourse.

My borther's a corporate lawyer, if yuo wish I can get confirmation of exactly what tax levels were on what years, however I think even then you would still think you were right as it seems you are not big enouhgh to admit that there is probably a provincial differenc ein federal taxation, as we have seen many times and will also see when HST comes into play.

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