Friday, April 30, 2010

The HST: It's about innovation

Interesting article from the left coast:

At a time when we are getting into an economic recovery, introducing tax reforms like the HST, and the personal tax cuts for 93% of Ontario are the most important things we can be doing to improve our innovation. The HST, which will remove the tax burden from each stage of production to a much flatter and simpler system which will make us more competitive and help fuel innovation, by making it easier for companies to do business here and create jobs. The times, and the economy have changed, and it would be foolish to think, like the opposition does, that Ontario can go back to the way things were. The province needs to take action to make our workers more productive, our businesses more innovative, and our economy more secure.

The article gives a practical example:

A recent report from Statistics Canada shows we are moving in the wrong direction. Instead of helping us stay competitive by adding machinery and equipment, Canada had a record level drop in this kind of investment during the last recession. In the short run, this had a small benefit: companies that were not spending on improving productivity could afford to keep more workers on and minimize unemployment.

HST will make it easier to become more productive.

In the long run, not investing in the tools that will increase productivity is like not giving your child needed medical treatment because it will hurt. Less productive companies may end up with all their workers becoming unemployed as they lose their customers to more productive producers.

There are many things we can do to improve our economy and our job base. We can undertake research and apply new, innovative ideas. We can add human capital, training workers at all levels.

But the fastest and most immediate thing we can do is to apply more of the machinery, equipment and technology that already exists. By reducing the cost of investment for companies, the HST will make it easier for us to do this.

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