Confronted with an NDP study that suggests the harmonized sales tax will cost the average family an additional $792 annually, McGuinty conceded consumers’ costs will go up July 1. The study is based on number crunching by Statistics Canada.

“For families at the outset, there will be an increase in taxation,” the premier told reporters Tuesday at Queen’s Park.

“It will affect … 17 per cent of their purchases,” he said, referring to items such as gasoline, home energy and Internet bills, tobacco, domestic flights, haircuts and taxi fares that will be taxed at a higher rate.

Exempted from the HST are newspapers, books, coffee, fast-food meals under $4, diapers, children’s clothing and booster seats, and feminine hygiene products.

Taxes on 83 per cent of products – including groceries – will not change.

Many economists predict the business-friendly blending of the 8-per-cent provincial sales tax with the 5-per-cent federal GST will boost the economy, eventually creating up to 600,000 jobs and generating $47 billion in investment.

“Experience tells us that over time those savings (incurred by business) will in fact be passed on to consumers. It’s not going to happen all at once,” the premier said. Continued...