Ontario's tax plan for jobs and growth : Plan fiscal de l'Ontario pour stimuler la création d'emplois et la croissance : document technique sur l'incidence des modifications fiscales sur les Ontariens

The purpose of this paper is twofold: • To present the impacts on households in the first and third years of the HST, excluding the higher income growth that is expected due to the tax plan; and • To describe the methodology and assumptions underlying the analysis. [...] The model was then augmented using data from Statistics Canada’s Social Policy Simulation Database and Model (SPSD/M) to estimate the impacts on households from the replacement of the RST with the HST and the pass-through of business cost savings due to the HST and other tax reductions. [...] Also, the estimated impacts on households reflect the assumption that the number of households and incomes in 2010 remain constant over the time periods examined and without adjustment to the income tax parameters in the third year. [...] A similar concern was raised in an evaluation of the tax plan by Ernie Lightman and Andrew Mitchell where the authors excluded those with incomes of less than $10,000 from their results.3 The following sections describe the methodology and assumptions used in estimating the impacts of the HST, the permanent and temporary tax relief measures for people, and the pass-through of business savings. [...] However, the analysis by Smart and Bird found that the CPI fell even more than would have been expected simply based on the lower tax added on to the price, and that reflected the pass-through of cost savings from elimination of the tax on inputs used in production.