How do you know McGuinty?/VAT versus GST/PST/HST
While I almost dislike McGuinty as a person
How do you hate someone 'as a person' unless you've spent a fair amount of time in his company? You can hate him as a politician, but as a person?
No value added? If I buy a house for 250,000 and sell it for 300,000, that is 50k of value realized which I would be effectively taxed on. It shouldn't matter how I add that value so long as someone else perceives it to exist.
A VAT is trying to tax the amount of added value due to production/labour. That's why they're complicated, ideological, and tend to get messy.
Your example house's price appreciation is just that -- asset price appreciation (which may or may not be deserved). Not value-added. And, as you point out, the GST doesn't care about whether you've added value -- the GST doesn't try to make judgement calls.
But I think all of that is beside the point on HST. The point of HST is to spread the tax across those 'carve-outs' the politicians had made to the PST for political reasons. It broadens the tax base, theoretically allowing for a lower overall tax rate (it also makes it easier to collect, but I'm sure those savings will get eaten up somehow by the dual government bureaucracies.)
Now that BC is also going to HST, I think this whole thing will go through with a minimum of grumbling.