TORONTO — The Canadian Federation of Independent Businesses (CFIB) is a non-profit non-partisan lobby group with 42,000 members in Ontario, including almost 2,000 agri-businesses and farmers.

The point-of-view of the CFIB is determined soley by its members through surveys.

The CFIB’s senior policy analyst Pamen Petkov spoke with Farmers Forum editor Patrick Meagher recently on the Harmonized Sales Tax, which will combine the Provincial Sales Tax and the Goods and Sales Tax on July1. The most obvious result of the tax will mean an increase in taxes on many consumer goods and services that were previously PST exempt..

"This is probably the biggest tax reform in the province. It is extremely important to our members. We did a survey of our Ontario members last summer. Our agri-business members – including farmers — told us they didn’t like the fact that the government announced the HST as a done deal. There was no prior consultation. But farmers wanted to be heard.

The government did not do a good enough job to communicate this reform. Farmers and agri-businesses are sceptical about it and when you don’t know what is going to hit you, you assume the worse.

"In terms of beneficial aspects, 60 per cent said "none that I can think." That’s a huge number.

Twenty-nine per cent said that moving from two sales taxes to one is gong to reduce their paperwork by dealing with one level of government.

Twenty-two per cent said they would benefit from the input tax credits. But they don’t know how these input tax credits are going to work. Our message to government is communicate better with farmers.

In terms of harmful aspects, the number one concern is the impact of HST on consumers. Fifty-eight per cent said they are worried about the impact on consumers. In their view if the consumer has to pay more, they will be spending less on goods and services. Another concern is the effect the HST may have on the underground economy. We’ve seen this happening to a certain extent in the Atlantic provinces when they harmonized the taxes.

There is also a big concern in terms of the cost to adjust to the HST."

To make it a win for small businesses and to farmers we recommend the government reduce the combined rate by one percentage point,. Instead of 13 per cent, reduce that to 12 per cent to provide permanent tax relief. The reason for this recommendation is that we see our members are consumers.

Another recommendation is to make the tax visible. Don’t embed the tax in the price. Separate it on the invoice. This provides better clarity to the consumer. They know what they are paying for the product or service.

Legislation was passed in Ontario in December. It’s a done deal. Small business should have been consulted but they weren’t."

"We’re going to be circulating a checklist to our members to prepare them for it.