TORONTO — The province has promised to lower taxes for startups and family-owned shops as it continues to advertise Ontario is “open for business.”
The Progressive Conservatives will cut the corporate income-tax rate for small businesses from 3.5 per cent to 3.2 per cent, according to the fall economic outlook released Wednesday. The province says the tax break will save 275,000 businesses up to $1,500 a year, beginning in 2020.
“That’s not a small amount for a small business,” said Finance Minister Rod Phillips at a news conference. “This isn’t about grand gestures. It’s about incremental change that make a difference in people’s lives.”
One of two tax breaks in the outlook, the reduction fulfills a “key campaign commitment” to reduce small-business taxes by 8.7 per cent and will cost the province up to $95 million a year, Phillips said.
NDP Leader Andrea Horwath said this measure is not what small businesses need and that they’d be better off if the province made significant investments, rather than cuts, in other areas.
“When I talk to small businesses, they want relief, sustainable relief on their hydro bills, access to skilled workers and infrastructure investment to move goods and workers much more efficiently and effectively around their communities,” Horwath said at a news conference.
The fall outlook demonstrates Ford’s “cruel and callous cuts are here to stay,” she said.
The province claimed a combination of efforts will save small businesses a total of $2.3 billion next year. These measures include cancelling cap-and-trade, freezing the minimum wage at $14 an hour, accelerating capital investment write-offs and reducing WSIB insurance premiums.
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“These savings can be reinvested to help these businesses grow, create more jobs and boost the economy,” Phillips said.
The second tax cut is for northern communities. The province said it will reduce its tax on aviation fuel for northern operators — from 6.7 cents per litre to 2.7 cents — to alleviate the cost of travel and transporting food to areas such as Parry Sound, Thunder Bay, Sudbury and Kenora.
Groceries in the north are notoriously expensive. A 2016 study found that a family of four in Attawapiskat, Ont. spent an average of $1,900 a month on groceries, more than double what they would have spent in Toronto.
According to the province’s math, the reduced fuel cost could translate to food savings of $20 a month for a family of four.
Premier Doug Ford will also form an Advisory Council on Competitiveness that will consult with workers and business leaders to “find ways to improve competitiveness” in the province, Phillips said. He added that council members, who could be workers and business leaders themselves, likely won’t be compensated.
Correction: The headline has been changed to reflect that the tax cut is 8.7 per cent or 0.3 percentage points, not 0.3 per cent) and that the entirety of the tax cut occurred not since the PCs took power, but all on Nov. 6.