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Ont. wants Ottawa to drop GST on stop-smoking aids

Canadian Press

TORONTO — Ontario is calling on the federal government to follow its lead by snuffing out the sales tax on all over-the-counter products designed to help smokers quit.

On Monday, all nicotine replacement therapy products, such as nicotine patches, gum, lozenges, inhalers, sprays and tablets, will be exempt from the provincial sales tax.

Ontario Health Promotion Minister Jim Watson, who announced last month the province would drop its sales tax on these products, said the federal government should do the same.

"I'm hopeful that the federal government will see that this is a good tax cut that they should be involved with," Watson said in a telephone interview.

A smoker who spends about $300 over 10 weeks on nicotine replacement therapy products would save roughly $24 as a result of the dropped sales tax, Watson said.

If the federal government followed suit and dropped the GST on such products, it would save Ontario smokers another $18 dollars, he added.

"It's not a huge amount...but we think it's a good way to let people know the government of Ontario is serious about helping people to quit smoking," he said.

Watson said he's lobbied federal Health Minister Tony Clement and Finance Minister Jim Flaherty to drop the GST on the over-the-counter products, but has yet to hear anything from them.

Flaherty's press secretary, Chisholm Pothier, wouldn't rule out eliminating the GST on nicotine replacement therapy products, saying "everything is under consideration as we determine what we are going to do for tax relief in Budget 2008."

An opposition member of the Ontario legislature scoffed at Watson's federal plea, calling it "pre-election posturing."

New Democrat Paul Ferreira said Watson's appeal to the federal government is a "diversion" from the province's lack of "any meaningful tobacco control measures."

"It's more of the blame game from this government. They always look for somebody else to put the spotlight on to try and take away from their own failings," Ferreira said.

Progressive Conservative health critic Elizabeth Witmer said her party supports every initiative to help people quit smoking, but she added the timing of Watson's plea to the federal government is "somewhat suspect."

"They had four budgets (to remove the PST), they could have done it, and here we are, just prior to an election. It looks to me like an election goodie," she said.

But Watson said other ventures, such as the Smoking Treatment for Ontario Patients study, have helped 31,000 smokers kick the habit through free nicotine replacement therapy and counselling services.

Ontario stands to lose roughly $5 million in tax revenue a year by dropping the PST on nicotine replacement therapy products, but Watson said it will save the province money in the long run.

Smoking kills an average of 16,000 people in Ontario each year, while tobacco-related diseases cost the health care system about $1.7 billion annually, he said.

Smoking accounts for at least 500,000 hospital days each year and is blamed for more than $4.4 billion in productivity losses.