2018 Provincial Budget

On Wednesday, March 28, the Government of Ontario presented its 2018 budget. This budget included a number of important announcements including:

  • approximately $450 million in new taxes for business over the next three years;
  • investments in skills development, including $170 million for Ontario’s Apprenticeship Strategy; and
  • a $500 million investment in broadband for rural and Northern Ontario over three years.

Keep reading for additional for additional details on the 2018 budget. You can also find our full press release here, and the OCC’s analysis here.

$450 million in new taxes for business

The provincial government has decided to follow the federal government’s lead in revising eligibility criteria for the Employment Health Tax. This means that over 20,000 Ontario businesses will pay more than $100 million in additional taxes over the next three years.

The provincial government is also phasing out the small business deduction for businesses earning between $50,000 and $150,000 of passive investment income. This  will result in an additional $350 million of taxes over the next three years.

Your chamber is concerned that instead of addressing the ever-rising cost of doing business, the provincial government has only added to the burden facing Ontario’s business community. We are reminding the government that Ontario’s businesses have been and will be central to growing shared prosperity in Ontario: the budget itself notes that the majority of the 800,000 new jobs since the recession have been in the private sector, and have been full-time and above average wages. This increased tax burden risks undermining the important role that our business community plays.

$170 million for the Ontario Apprenticeship Strategy

The provincial government announced an investment of $170 million over three years in the new Ontario Apprenticeship Strategy (OAS). The OAS includes a number of initiatives, including expansion of the Ontario Youth Apprenticeship Program (OYAP), a Local Apprenticeship Innovation Fund, continuing education opportunities for trade professionals, and a grant to promote pooled group sponsorship models for apprentices.

Your chamber is pleased to see this investment in developing a skilled workforce. Access to skilled labour continues to be a top barrier to growth for Greater Sudbury’s business community and we applaud efforts to address the issue. We are particularly encouraged by the prospect of pooled group sponsorship models for apprentices because this may address prohibitive apprenticeship ratios that prevent Northern Ontario’s employers from hiring apprentices.

$500 million for rural and northern broadband

The provincial government has committed $500 million over the next three years to broadband investments in rural and Northern Ontario. $20 million of this will be allocated toward developing a Low-Earth Orbit satellite project, which will provide internet access in remote communities in Northern Ontario. The government also reaffirmed its October 2017 commitment of $30 million for broadband internet in five Matawa communities.

Broadband access is more important than ever for the economic well-being of communities in Northern Ontario. Broadband access ensures that businesses are able to participate in a 21st century economy. Broadband ensures that communities are able to connect to services, new markets, and each other so that their businesses can grow and prosper. This investment was a key ask of your chamber’s pre-budget submission and we applaud the government for making this commitment.

Other budget announcements

Budget 2018 contained a number of other important announcements for Greater Sudbury’s business community.

  • Cap and trade: your chamber called on the provincial government to provide more clarity on the expenditure of cap and trade revenues, and to prioritize reinvestment in businesses. Unfortunately, the government does not include cap and trade expenditures as specific line-items in the budget, and less than 2.5% (approx. $45 million) of cap and trade revenues are allocated to developing low-carbon technology — a key ask of the business community.
  • Ring of Fire: after omitting the Ring of Fire from the 2017 budget, the provincial government has renewed its $1 billion commitment to develop transportation infrastructure for the Ring of Fire. This investment will be key to developing the mining project and to Northern Ontario’s economic well-being. We are encouraged by this commitment and urge the government to expedite the project.
  • Budget deficit: although the provincial government is projecting a surplus of $0.6 billion in 2017-18, there will be a deficit of $6.7 billion in 2018-19, and the government does not project a balanced budget until 2024-25. While the near-term deficit is projected to be less than one percent of the GDP, this comes at a time when Ontario’s economy is relatively strong. We are concerned about the precarious position in which this leaves the province.

Author: Andy Veilleux