Prime Minister Stephen Harper has announced that as of today, January 1st 2008 the Goods and Services tax will drop by 1%, bringing it down to 5%.  
 Quote from The Office of the Prime Minister website:
Reducing the GST from six to five per cent builds on the Government’s initial cut from seven to six per cent on July 1, 2006 and fulfills the campaign promise to lower the GST to five per cent. This permanent tax cut will benefit all Canadians regardless of age or income – including those whose incomes are too low to pay income tax. For consumers the total savings from the two per cent reduction will be almost $12 billion next year.
I was just listening to a show on the radio about this. The economists said that this will benefit the rich in society the most since they spend larger amounts of money on items such as boats, homes and luxury items.
An income tax cut would have been better for the average working Canadian.
One of the latest debates is on Edmonton Sun (Dec 28, 2007).
http://www.edmontonsun.com/Comment/2007/12/28/4742473-sun.html
IMO, Goldstein won over Granatstein.
IMO the richest of Canadians won. The poorest of Canadians lost. Oh well, I guess the politics of a situation will always be at the forefront.
agreed alex. i was just hearing the same thing. i was quite excited to first hear about this, but now it is obvious it is just another gimmick pulled by the government. do ur research ppl, there are other alternatives that would benefit us and our economy in the long run.
The poorest of Canadians do not need to pay income tax so they will not receive the benefit of an income tax cut.
The poor spend proportionally more of their earnings than the rich. Hence, cutting GST helps the poor more than the rich.
Here is a joke from my economics professor (I can’t remember the exact words though):
economists spend the first 6 months to predict what’s going to happen, and the remaining 6 months to explain why their predictions didn’t happen.
I get your logic Mid. The poor will save more of their limited income. I guess what others see is when their is no limit to what someone can spend, well in real dollars a wealthy person can benefit greater than anyone.
I guess we should be happy anyway that at least both groups will have more in their pockets, but I think those less well off need it more.
Take care.
Ah, a tax cut I can only benefit from by buying more things …
Surely the federal government could do much more with $12 billion than I can with $200 next year? Maybe pony up some money to cash-strapped provinces and cities? Thanks to the shortcomings of provincial healthcare, I already have to pay $300 to have a tooth extracted …
This is really great…
But guys have a look at the image. Why does the old sticker say 7% it should say 6%… hehehe GST has been 6% since beginning 2007.
Great observation Saeid A.
Kind of gives evidence to the fact that everything is staged nowadays. All the 7% and 5% visuals are probably from the governments media package kit.
yay now they can raise the taxes even more so on something else.
Last time the gst went down my hubby started having 25 bucks extra a paycheque come off for some health tax.
So really, I dont see it as a win situation.
No one enjoys paying tax. I would prefer to pay tax to our healthcare than anything else. This year I had to have surgery in one of Ontario’s hospitals and I received A1 treatment from an excellent surgeon. You really appreciate it when you need it. I have done a lot of reading about the healthcare system for profit in the United States. If you are rich you are ok. If you are middle class or lower economic class it is a financial worry.
Yes but if they hadnt of raised that they would of raised some other tax.
Lose lose.
You were lucky to find good health care, here thousands of people cant even find a family dr, and its been like that for years.
We have the same issue. I still have a family doctor in another city not too far away. I think it is going to get worse because a lot of them are going to retire. My dealings were with specialists. I am very thankful.
I think a lot of people want OUR system to get better. Not an American style system. If you look at the stats of the world health organization you will see that the ‘for profit’ American system cost twice as much per person as the Canadian. You also have the big insurance companies employing people who specialize in looking for reasons to deny claims. If you get a chance watch Sicko by Michael Moore. It is very interesting.
The 7%/5% thing is just Harper demonstrating how he lived up to his campaign promise — It was 7 when he came in, and he said he’d bring it to 5.
The government should not have lowered the GST another percent. I mean sure we save a few bucks but it’s really not all its made out to be. Thats –12 billion $ the government now has to spend on social services that really do benifit us. This might actually make healthcare go up, meaning we might have to pay for more when we go to the hospital. Our healthcare is on the verge of collaspe as we always seem to have to pay for more an more things every visit. I say the government should of kept the GST at a reasonable 6%. I don’t like the Harper administration at all in my eyes they kiss George Bush’s @$$. They actually kept one of their promises, I’m surprised, why don’t you keep another and give Canadian customs firarms to better protect our boarders like you said you were. Lowering the tax only saves us money it doesn’t really do much to benifit society in a greater way.
It’s all about optics.… they opted for the GST cut because people can actually *see* that they are doing something, how little it may be. I would have preferred that they pay off the debt sooner… $30 billion in interest annually buys a lot of MRI/CAT scan machines.
With the cut, I’ve only seen the price of a coffee and a liter of gas fall by $0.01. And the crooks at the GTAA (Toronto Airport Authority) have instead chosen to pocket the difference instead of lowering parking fees.
Mat, they’ve already started arming the border guards.
I’m saving 4 cents on my coffee!!!
Marketplace ran an interesting piece, about we’re not seeing the savings.
Movie stores, taxis and most retailers just cut the tax and raised prices. To absorb the tax cut for themselves.
Did you really think a tax cut was going to serve the populace?
If they cut all the gas tax down, about 25–30 cents right now for each litre.…how long until the companies would just raise the price, and enjoy that extra gravey on their plate.
So we take away the tax, and now shareholders get the cash. Great, less for our beaten up roads and schools, and more for people to buy yachts and planes with. Great plan.
I think society has to have a basic saftey net such as unemployment and health care. I don’t mind the doctors getting rich from health care, they went to school to earn that right…
I do not however, like soem private corp, whose expetise is..management to siphon off dollars for it’s owners however. I have no wish to make more “other” people rich.
I like paying for direct services, but the “ugly” middle men of our system eat up so much…and do nothing!
What about this report from CBC’s Market Place that shows that the saving is not even being passed on to the customers:
http://www.cbc.ca/marketplace/penny_pain/
Doesn’t seem to be benefiting me all that much.
Please, are you able to Pm me and tell me few extra thinks about this, I’m actually fan of one’s weblog… gets solved properly asap.