MP fights GST on hydro bill
Consumers are paying tax on debt

Sarnia Observer - October 10, 2002
by Cathy Dobson

Sarnia-Lambton MP Roger Gallaway is railing against his own government and that of Ontario Premier Ernie Eves for what he calls a gross inequity concerning GST on Ontario hydro bills.

The standardized Ontario hydro bill not only includes a debt retirement charge, but it also tacks on the federal government's seven per cent Goods and Services Tax to the debt charge.

That means Ontario consumers will pay $17.1 billion toward the former Ontario Hydro debt, as well as about $1.2 billion in GST, according to Gallaway.

"It's clearly wrong and I think outrageous," he said Wednesday. He called the GST charge "a total embarrassment" to Finance Minister John Manley, since the federal government set up the GST in the first place.

On Tuesday, in the House of Commons, Gallaway asked Manley about the GST on the debt retirement charge, pointing out that the federal government will pocket $1.2 billion as a result.

"There are many families and businesses which are hard-pressed to keep their lights on," Gallaway said. "To think that an additional $1.2 billion will be extracted from them simply because one level of government ran up a debt, is cruel, illogical and punitive."

Manley replied that he would answer at a later date by letter.

By Wednesday, Gallaway had taken his case across Canada, granting numerous interviews.

He had no apologies for taking his own government to task. "This has nothing to do with party colours," he told The Observer. "I'm elected to speak when I see an inequity and this is a gross inequity."

He also criticized the Ontario government for setting up a bill structure that applies the GST to the debt reduction charge.

"The Eves government is not innocent," Gallaway said. "This is a case of the public suffering under a burden of high payments."

A Sarnia-Lambton resident brought the issue to his attention, Gallaway said, and his office began an investigation.

He estimates the average residential consumer pays about $1 in GST related to the debt charge every time they pay a hydro bill, even though the debt charge has nothing to do with goods and services.

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