Finance minister promotes HST credit during Northern visit

A proposed $35-million energy tax credit for Northern Ontarians is not nearly enough to cancel out the increased costs taxpayers will face when the harmonized sales tax comes into effect on July 1, says provincial NDP leader Andrea Horwath.

"The finance minister will be in Thunder Bay later today to sell his northern energy credit. Before the finance minister does his dog and pony show, will the government tell Thunder Bay families exactly how much the HST will cost them on utilities and gasoline alone?" Horwath asked during Monday’s question period at Queen’s Park.

When confronted with the statement, Dwight Duncan was quick to respond.

"She’s wrong. We’re doing exactly what many, including (Horwath), said we should do," Duncan said, standing outside the east end home of Sue Paskoski and her 14-year-old son Christopher Gibb.

"It is designed to help families … It’s very generous, it’s unique to the north and it will help many families. New Democrats in Nova Scotia just raised the HST by two points. This package, as well as some of the previous programs we’ve done on energy conservation will help."

The credit, first announced last week, is part of the province’s Lowering Energy Costs for Northern Ontarians Act, and if passed will provide relief to more than 250,000 low- and middle-income families, Duncan said.

Under the proposal, a single person making less than $48,000 annually will be eligible for a maximum credit of $130, while families making less than $65,000 a year would be eligible for a credit worth up to $200.

The HST will merge the provincial sales tax and federal goods and services tax, and will be applied to a number of services that until now have been exempt from GST collection, adding five percentage points to items such as gasoline, home heating and ice rentals.

Horwath cited a Thunder Bay family she visited while here last summer, the Miltons, who pay up to $600 a month for furnace oil to heat their home. She said the couple will face as much as an additional $50 a month during peak heating season.

"The credit won’t offset that added cost," she’s quoted as saying in SooNews.ca.

Northern caucus chairman Bill Mauro (Lib., Thunder Bay-Atikokan) countered, saying it’s just one of many ways the provincial Liberals are helping Northern Ontarians cope with rising costs.

The proposed energy credit will help immensely, he said.

"This is a significant amount of relief in a Northern climate, where people do tend to pay a little bit higher for their energy costs," Mauro said, adding that every $100 in tax credits will negate the HST on $1,250 worth of goods and services.

Duncan said it’s well noted in the provincial legislature that high energy costs are a burden to Northern Ontario residents, who face a harsher climate which leads to higher energy bills.

He also said the credit will help northerners in hard-hit communities close the gap with their more prosperous neighbours.

"This is designed to eliminate the differential between the north and south for families and individuals."

Paskoski, handpicked by the Liberals to speak for Northern Ontario residents, said she’ll be first in line to fill out an application for the credit, and while she’s skeptical about the impact the HST will have on her ability to raise her son, she’s willing to take a wait-and-see approach for now.

"Anything that puts money back in my pocket and helps me take care of my son is welcome in this home," she said. "Although I know there’s a lot of concern about the HST that’s coming, these credits sound like they’re a good thing for northerners. So I’m happy with it."

The initial credit will be paid in two installments in 2010, and quarterly after that. It is only available to eligible residents, over age 18 and paying either rent or a mortgage for the primary residence, in the districts of Algoma, Cochrane, Kenora, Manitoulin, Nipissing, Parry Sound, Rainy River, Sudbury, Thunder Bay and Timiskaming.