Although Alberta has not levied a harmonized sales tax (HST), many Albertans — including local school boards — are still paying HST on things like mutual funds and postage on packages destined for provinces that have implemented the tax.
On July 1, 2010 Ontario and British Columbia harmonized their provincial sales tax with the federal GST to create HST. The tax is administered by the Canada Revenue Agency.
In Ontario, a 13 per cent HST was levied — five per cent for the federal portion and eight per cent for the provincial part.
In British Columbia, a 12 per cent HST was levied, five per cent going to the federal government and seven per cent to the province.
Alberta has no provincial sales tax, but that doesn't mean people here aren't paying to other provinces.
"Right now, when Albertans are mailing parcels to an HST province and postage costs over $5, then HST is levied," explained Nick Kaczmarek, with Alberta Finance and Enterprise.
"When Albertans purchase mutual funds through financial institutions, it's possible that they might end up sharing an HST cost," he added.
Kaczmarek said some financial institutions may roll the HST into their management fees.
In one of several letters sent to federal Finance Minister Jim Flaherty this year, Alberta Finance Minister Ted Morton said Albertans should not have to bear the burden of another province's consumption tax.
He urged Flaherty to take action so the HST is not shared with investors who reside in Alberta and other provinces that have chosen not the implement HST.
"Based on the principles of Canadian federalism," Morton wrote, "individuals residing in one province should not have to share in the burden of taxes levied by the government of another province."
Morton suggested the federal government immediately suspend the application of HST on investment management services, arguing that doing so would improve fairness, reduce the costs associated with saving and may even promote greater saving by Canadians.
In his correspondence, Morton urged Flaherty to re-examine the $5 limit on parcels, which was set in 1997.
School boards
The HST will also have some impact on school boards in Alberta.
Michael Brenneis, secretary-treasurer with St. Albert Protestant Schools said the board recoups 68 per cent of the GST but cannot recoup HST.
"Basically, we're only allowed to recoup on the five per cent, so the federal portion, of the HST. You have to be a resident of that province to collect on any province and of course, we're not a resident of any of the provinces that have implemented the HST," Brenneis said.
The Greater St. Albert Catholic School Board will be similarly affected by the HST.
Carol Bruineman, communications manager with the board, said paying the HST, as it relates to shipping charges, will have a minimal effect on the board since most shipping is done within Alberta.
She said the division is looking into a mechanism to ensure they maximize any HST recovery for which they are entitled.
Brenneis said since the HST was only introduced in July, it is still too early to know what the actual cost effect will be on school boards.
"We don't really have a representative sample to quantify an impact but there has been some impact already this year."
