Newspapers, but not magazines exempted from Ontario HST

[This post has been updated] The announcement by the government of Ontario on Thursday that it would now exempt newspaper subscriptions from the new 13% harmonized sales tax (HST) means that magazines are alone among print publications will face an effective 8% increase in taxation come June 2010. Or, to put it another way, magazine buyers will pay 13% tax (5% GST + 8% PST, combined) while newspaper buyers will pay no tax at all. 

"We're just gobsmacked," Mark Jamison, chief executive officer of Magazines Canada told the Toronto Star. "I'm quite certain that we will lose magazines. This will be the last straw. This came as a total shock because we made the same economic and cultural arguments ... as newspapers."

This decision is both arbitrary and profoundly unfair as well as crassly political. Newspapers compete in the same marketplace in Ontario for subscription and advertising revenue, and magazines are suffering the same economic impacts from the recession as newspapers. This  seems to have made no difference. 

[Update: Premier Dalton McGuinty said today that there will be no more exemptions and that "we have all but nailed this down".]

The decision was designed to curry favour with the voters in the Tim Hortons across the country, freeing up their morning coffee and single copy newspaper purchases from tax. It will have much wider implications, since it apparently applies to home-delivered newspaper subscriptions as well. 

So we have the prospect of enormous chain monopolies such as CanWest, Quebecor and Torstar (who account for most of the daily and community newspapers in Canada) being given tax relief while magazines (some from large companies, but many, many of which are small, independents) are  hit hard. 
It only rubs salt in the wound that the spokesman for newspapers preened: "It's a really good example of government listening."

As far as we can see, it is selective listening at best. What possible justification can it be to exempt newspapers and not exempt magazines? Every publisher of every little magazine, large and small, needs to get on the phone right now to Queen's Park and their MPP and demand that this anomaly be made right.

Related posts:

• Ontario HST on magazines goes ahead, but subs prepaid before July 1, 2010 are exempt
• Ontario magazine publishers seem resigned to HST
• Harmonized Ontario tax confirmed; magazines to take a hit