Ontario premier admits families will take a hit with the HST -- and so will their subscriptions

It turns out that critics of the HST haven't been crying wolf; in fact, the average family earning between $70,000 and $80,000 a year will pay $722 more a year, according to a story in the Ottawa Citizen. It was based on data commissioned and released by the Ontario New Democratic Party. 

The analysis, based on Statscan data, shows that the added burden of the new value-added tax will be between $4.7 million and $5.9 billion. 
Since some of the added burden on families includes 8% more for magazine subscriptions, which are discretionary, it seems highly likely that there will be a dampening effect on sub sales. It is no comfort that the Ontario premier Dalton McGuinty is now admitting this fact.

For some impenetrable reason Ontario decided to exempt newspapers from the 8% increase, even though magazines and newspapers are competitors in exactly the same business, with the same revenue sources (advertising and circulation).

Related posts:

• HST is not a new tax? Ask your subscribers
• What HST means to your magazine in ON and BC
• Newspapers, but not magazines, exempted from Ontario HST
• 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

HST is not a new tax? Ask your subscribers

It's curious, that Tony Wanless, a blogger for BC Business magazine's website, takes a poke at opponents of the HST and suggests that they're too thick to understand that it's not a new tax, but rather a simple blending of the old provincial retail tax and the goods and services tax that most people pay anyway. The reason it's curious is that, in BC (and Ontario) it IS a new tax on some goods -- 7% more in BC and 8% more in Ontario -- such as magazine subscriptions. No one knows what the eventual impact will be, but one rule of thumb is that an increase in out-of-pocket costs will inevitably result in an decrease in sales. We imagine the magazine that hosts him can ill afford such a revenue hit. (He seems to be fairly sanguine about the 7% tax increase on his consulting fees as CEO of Knowpreneur Consultants.)

What HST means to your magazine in ON and BC

Masthead magazine has published a succinct and useful Q & A summary of the looming impact, come July 1, of the imposition of the harmonized sales tax (HST)on magazines in B.C. and Ontario (where 2/3 of Canada's titles are published.)

Ontario HST on magazines goes ahead, but subs prepaid before July 1, 2010 are exempt

Ontario has released information on the transitional rules concerning the new harmonized sales tax and, as expected (or feared), there is no exemption for magazines. As of July 1, 2010, the cost to consumers of single copies and subscriptions will go to 13% as the new tax blends the provincial retail sales tax (PST) of 8% and the federal goods and services tax (GST) of 5%. That's the bad news.

The good news is that the province will not apply the tax to prepaid subscriptions, as it had previously planned to do. This is the result of some considerable lobbying by Magazines Ontario. So magazines should be thinking of a major circulation drive in advance of July 1 2010 with the pitch to consumers that by buying now, they'll save themselves the equivalent of $2.40 on an annual $30 subscription. Even better if they can be convinced to buy 2- or 3-year, or even lifetime, subs.