Despite the security fence between them, G20 leaders and the noisy protesters with a plethora of causes on their minds were closer than you might think in that both groups craved the attention of the international media while seemingly accomplishing nothing on the weekend in smouldering Fortress Toronto.
On one hand, you had a federal government blowing $1.2-billion for a dog-and-pony show that could have been done so much more frugally if egos weren’t in overdrive.
On the other hand, you had throngs of protesters with enough anarchists in their midst to make repressive security not only necessary, but critical in this post 9-11 era and their shopping list of pet causes was so lengthy that the leaders and media couldn’t have possibly taken them seriously.
Protesters like politicians love their photo ops and, like an opposition party, have a million things to attack governments on without focusing their efforts in order to get things done.
So, we heard a lot about gay rights, women’s rights, poverty, the legalization of marijuana and any one of a number of issues as the protesters marched and gathered at Queen’s Park, one of several Canadian epicentres for a repressive tax that kicks in Thursday in both British Columbia and Ontario.
The Harmonized Sales Tax (HST) will blend the GST and the respective provincial sales taxes on a wider variety of goods and services, including golf. In B.C., that means an extra seven per cent, while in Ontario, it will be an added eight per cent.
In all of the rhetoric that went on in Toronto on the weekend, not a word about the HST was mentioned, at least from the news reports I heard, even though the HST is targeted directly at consumers, whose paycheques aren’t going up along with this added cost.
Not that it matters, but golf isn’t likely to get any sympathy from the anti-poverty activists due to its reputation as a rich man’s sport among the ignorant and choose-to-be-ignorant, but it is a recreation with health benefits for all ages in this country, which you would think would make it HST exempt.
Such is not the case, so unlike the throngs of protesters in Toronto on the weekend, the golf industry must focus specifically what effect the HST will have as of Thursday. The current GNN Poll asks the question:
What do you think will be the long-term consumer reaction to the HST?
If you haven’t already, be sure to make your opinion known at the poll or in the comments section below.
Most people I’ve talked to in the industry expect initial grumbling, but feel it will die down as people begin to accept what simply amounts to, in their eyes, an increase in the cost of green fees and memberships, no matter how many smiley faces governments put on it or fireside chats they hold to discuss the HST.
As of Thursday, you as golf operators, are on your own to deal with the sticker shock.
Happy Canada Day.
Personally, I see a number of different ways that the HST can affect golf, starting Thursday but carrying on, perhaps for years:
After the initial grumbling about green fees starting Thursday, how will private club members react when they see their full-year dues for the first time? To this point, the HST has only been applied to a portion of the year in most cases. The full blast will hit the next time their memberships come due.
When we discuss the effect of the HST on golf, we tend to focus on its application to green fees/memberships, etc., but with it being tacked on to a wider variety of goods and services, many of them essential, from outside of the game, so how will less disposable income affect the number of rounds played?
In a place such as B.C., what effect will the HST have on tourism? A large Canadian market in Ontario is already dealing with an added eight per cent, so will that put a damper on vacation plans? In this respect, it could affect non-HST provinces that rely on visitors from provinces that are affected by the tax. As for Americans, the loonie is almost at par with the U.S. dollar, so will an added tax further add to reluctance to cross the border?
Speaking of those provinces not yet affected, the HST appears to be like a weed spreading across Canada. Many in the unaffected areas feel it’s only a matter of time before it arrives in one form or another in their backyards.
There are no guarantees that governments won’t jack up the HST in the future. In Nova Scotia, we’ve seen the provincial government raise the provincial portion of the tax by two per cent. The 15 per cent that Nova Scotians will pay kicks in tomorrow as well. The HST could be seen as a convenient cash cow.
After the implementation of the HST, how will your clients/members react when it becomes necessary for you to raise your prices? Will they distinguish between the government’s take and your price increase, even if it’s just to keep up with inflation, or will they just look at it as an overall increase that could amount to, let’s say, 12 or 13 per cent over two or three years and not care where it’s going?
Oddly enough, one of the discussions at an unnecessary $1.2-billion summit, complete with its fake lake for the media, was the importance of cutting deficits around the world by 2016, but you have to wonder how much economic stimulus will be provided by consumers who now face an additional seven or eight per cent in taxes.
It could be argued that the G20 was a federal show, but the price tag of that summit is just an example of government spending – and we all have horror stories of government waste at all levels – that defies the very message they’re trying to convey.
Only when governments at all levels are willing to lead by example can they justify the HST, so as you stress the message to your customers/members that the extra tax isn’t your fault, the temptation might be to hope for a short protest period when a long-term memory might do more good.
That way, instead of setting police cars on fire and rioting, they can deal with those who brought in the HST on election days in their provinces.