Hampton questions cross-border competition

Submitted by
Howard Hampton, MPP

QUEEN’S PARK - Howard Hampton, NDP MPP for Kenora Rainy River, asked the Minister of Revenue why the McGuinty Liberal government is allowing U.S. propane suppliers to cross into Ontario and woo consumers with a “don’t pay the HST” sales pitch.
“Thousands of cabins, cottages, homes and tourist resorts on Lake of the Woods and Rainy Lake use propane to meet their energy needs,” Hampton said. “Why are propane companies that operate out of Kenora and Fort Frances being forced to compete with U.S. companies based in Minnesota who are offering up this ‘don’t pay the HST’ deal?” asked Hampton
Hampton says, “propane operators based out of Kenora and Fort Frances are forced with a loss of business because of the HST and the fact that Minnesota companies who are selling propane don’t meet the safety standards of the Technical Standards Safety Authority of Ontario.”
“What are you going to do to fix this situation where your government has put Ontario-based propane suppliers in a deep hole because of the HST and the TSSA rules?” Hampton asked.
Excerpt from the Instant Hansard transcript detailing Hampton exchange in the Legislature. Wednesday, November 17, 2010

Taxation
Mr. Howard Hampton: My question is for the Minister of Revenue. There are literally thousands of cabins, cottages, homes and many tourist resorts on Lake of the Woods and Rainy Lake. Most of them use propane to meet their energy needs. Sometimes the propane is delivered by truck, where there is road access; sometimes it is delivered by barge over the water, where there is no road access. It has come to the attention of people that American companies are saying to people who live on the lake, “Use us as your supplier of propane, and will you not have to pay the HST. Can the minister explain why companies that operate out of Kenora or Fort Frances have to charge the HST but companies based in Minnesota are providing this service in Canada without charging the HST?

Hon. Sophia Aggelonitis: I thank the member for that question, and he’s right. We all use propane in some form, and a lot of people who live up north do use propane; it’s an important thing for all of us. But what the member should know is that any company that is selling goods or services in the province must collect all the federal and provincial taxes, including the HST. So I am unaware of that specific situation, but I will definitely follow up with the CRA and see exactly what is going on, and we will investigate.
But the fact is, what we are doing for businesses when it comes to our tax reform package, we have created a business-friendly environment. We’re helping businesses, building stronger businesses for our communities, and when businesses succeed, people succeed. They get jobs, and we invest in businesses.

The Speaker (Hon. Steve Peters): Supplementary?

Mr. Howard Hampton: Well, I would say this: The McGuinty government has certainly made it business-friendly for the propane operators operating out of Baudette, Minnesota, and International Falls, Minnesota, but you’re putting the operators based in Kenora and Fort Frances out of business. That’s what’s happening.
But it is more serious than that, because people are now asking, “Do these companies meet the technical and safety standards of the TSSA?” They’ve raised that issue, and they have not received a very good response from your government on that issue either.
Companies operating out of Fort Frances and Kenora have to meet the TSSA standards and they have to charge the HST, but it seems that for American companies doing business in Ontario, that’s not a requirement. What is your government going to do about it?

Hon. Sophia Aggelonitis: The member brings up a very important question. I did say that I will follow up with the CRA regarding an investigation. We know that all companies that are selling any goods or services in our province have to collect all federal and provincial taxes, including the HST.
We have a tax plan, and the tax plan is a great tax plan. I just wish that the opposition would see that.