Ontario Auto Insurance and the HST

by admin on April 23, 2010

Many Ontario residents – especially those living in Toronto, are concerned with how the upcoming Harmonized Sales Tax (HST) will be affecting their car insurance premiums once it takes effect on July 1, 2010. After a few years of auto insurance rate hikes, yet another reason for having to pay higher car insurance premiums would be the last thing many Ontario drivers need.

What is the Harmonized Sales Tax?

The harmonized sales tax (rate of 13%) will be applied to all goods and services, replacing the GST and PST. Additionally, the provincial portion (eight per cent) will be added for the first time onto goods and services that are currently subject to GST only.

What this means for drivers in Toronto

The harmonized sales tax is unlikely to have any effect on your car insurance cost, as you’re already paying GST and PST on auto insurance. Once the HST is here, you’ll see only one tax on your car insurance statement – the HST, instead of GST and PST; however, the total amount will be the same.

While the topic of whether HST is good for residents of Ontario is open to debate, drivers in Toronto (and the rest of Ontario) can rest assured that their premiums will not be increasing due to the new tax.

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