Ontario Government follows Ottawa’s lead in increasing taxes for small businesses
Greater Sudbury, Thursday, March 29, 2018 – The Greater Sudbury Chamber of Commerce, in partnership with Ontario Chamber of Commerce (OCC) and the Ontario Chamber Network, today cautioned that while the 2018 provincial budget proposes new spending for economic development, it does nothing to alleviate rising input costs or tangibly address low business confidence. In fact, the Ontario Government has chosen to follow the federal government’s lead on changes to the tax code that will result in significant new taxes on Ontario’s employer community.
The Ontario Government is harmonizing with the federal government’s eligibility criteria leaving over 20,000 employers paying $100 million more in Employment Health Tax over the next three years. In addition, businesses will be phased out of the small business deduction if they earn between $50,000 and $150,000 of passive investment income in the taxation year, resulting in an additional $350 million in new taxes for Ontario businesses over the next three years.
“Although the Government is making smart investments in skills development and broadband internet, the ever-rising cost of doing business in Ontario is hindering economic growth,” said Michael Macnamara, Chair of the Board, Greater Sudbury Chamber of Commerce. “The Ontario Budget not only fails to provide the offsets our members need, it will leave many of Greater Sudbury’s businesses paying more in taxes.”
The chamber is also concerned that cap and trade revenues are not being strategically allocated. The government estimates that it will collect about $2 billion through cap and trade, but only $45 million – less than 2.5% – will be invested in developing low-carbon technology. Without support to develop new technologies and processes, many businesses are at risk of being unable to transition to a low-carbon economy.
Despite these concerns, the chamber supports smart investments announced in the budget such as regional economic development funding, $500 million for broadband infrastructure, and additional resources for apprenticeship and skills development. The chamber also supports the government’s renewed commitment to the Ring of Fire.
The impetus for much of the government’s new social spending proposed by the Ontario government is to address the notion that prosperity is not being shared. The chamber contests the notion, however, that Ontario’s workforce is increasingly dependent on short-term, part-time work. As the Budget notes, of the more than 800,000 net new jobs created since the recession, the majority were created “in industries that pay above-average wages, in the private sector, and as full-time positions.”
“Ontario’s businesses are doing their part to create a fairer society, and the best way to ensure that continues is to consult with businesses and reduce their cumulative burden,” said Rocco Rossi, President and CEO at the Chamber of Commerce. “As the government and opposition parties turn their attention to the upcoming election, we again call on them to adopt our Vote Prosperity recommendations that will strengthen business competitiveness, foster job creation, build healthy communities, and improve government accountability.”