WHEREAS local governments depend almost wholly on property taxation to fund municipal services and are currently facing infrastructure deficits of enormous proportions; AND WHEREAS local governments and their taxpayers are unnecessarily burdened with sales tax charges on the purchase of all goods and services that include emergency equipment: Therefore be it resolved that the Province be petitioned to provide local governments full rebates of sales taxes on all purchases made, as are provided by the federal government for the goods and services taxes GST paid by local governments, with no commensurate reduction of current revenue sharing programs.
Ministry of Finance Local governments pay no more in Provincial Sales Tax PST under the Provincial Sales Tax Act than they previously paid under the Social Service Tax Act. The provincial rebate provided to municipalities under the harmonized sale tax HST of 75 per cent was to ensure that, on average, municipalities paid no more in tax under HST than was previously paid under the PST. Sales tax exemptions complicate the tax system and set precedents that could ultimately reduce the effectiveness of the tax as an important provincial revenue source. The province has traditionally chosen to provide grants and other forms of financial assistance to help local governments meet their objectives. Local governments are generally eligible for the same PST exemptions as other purchasers. Examples include certain kinds of emergency equipment and services, including work-related safety equipment worn by employees. Local governments are also eligible for PST exemptions specific to local government, such as certain types of emergency communications systems and machinery and equipment to generate electricity or heat and electricity at a co-generation facility.