Government of Ontario is implementing the Harmonized Sales
Tax (HST) on July 1, 2010. This will mean an increase
of 8% on many day-to-day expenses, particularly electricity
and heating fuels. Currently there is only 5% GST
on electricity, natural gas, heating oil, and propane, but
the implementation of the HST will add another 8% on top of
these utilities, bringing the total government tax
The HST will also increase labour charges
by 8% to 13% from the current GST-only 5% so unfortunately,
the HST also means that we as installers, and all other people
performing labour at a household, have to charge the 13% HST
instead of the current 5% GST.
What does all this mean to you as a homeowner?
If you're currently paying a total of $200 a month to London
Hydro (or another utility company) for electricity, you'll
be paying an additional $16 per month. Multiply
that over 12 months in the year and you're looking at $192
in more tax. The province is also implementing smart
meters in the near future, which will also increase your electricity
bill. Your hydro bill is going not going to be pretty over
the next few months!
Whether your water heater is fuelled by electricity
or natural gas, solar
domestic water heating can reduce your overall water-heating
bill by 50 to 60%. Water heating uses about 20% of a household's
total energy needs, so you'll save at least $27 a
month on average based on a $216 electricity bill
and a $54 natural-gas bill, for an average total energy bill
of $270. That covers the increase from the HST and puts money
back in your pocket at the same time.
If you don't use much hot water in the home,
another consideration is solar
electricity. The Ontario government will pay you
80.2¢/kWh over a 20-year contract for electricity
provided to the grid by using solar power. A typical system
rated at 2 kW can produce about 2.5 MWh of energy a year,
putting roughly $2000 into your bank account each year. It's
a guaranteed investment with a higher return than RRSPs and
the stock market, and you're also being green.
To learn more about the HST, go to www.ontario.ca/taxchange.