Yesterday, Ontario released its Fall Economic Statement. The government is projecting a $12.9-billion deficit for 2022/23, a figure which is $7.9 billion lower than forecast in the budget. Next year, the deficit is expected to fall to $8.1 billion, continuing its downwards trajectory to $700 million in 2024/25.
For small businesses, the Ontario government will be altering the 3.2% small business corporate income tax rate, such that the rate phases out between $10 million and $50 million of taxable capital (instead of between $10 million and $15 million in taxable capital). The government estimates that this will provide some $185 million tax relief over the next three years for some 5,500 small businesses.
Further, yesterday’s announcement highlighted that Ontario would be extending the reduction in gas tax by 5.7 cents per litre and the fuel tax by 5.3 cents until December 31st, 2023.
The Fall Economic Statement also focused on a number of initiatives to increase base support for low-income seniors and those on the Ontario Disability Support Program (ODSP), and continued infrastructure investment, like additional highways and broadband internet to rural communities.
The government also took the opportunity to highlight several historical benefits that it has provided to businesses in the past few years, including:
• Supporting a reduction in Workplace Safety and Insurance Board (WSIB) premiums and the WSIB rebate without reducing benefits;
• Increasing the Employer Health Tax (EHT) exemption from $490,000 to $1 million;
• Allowing businesses to accelerate write-offs of capital investments for tax purposes, including immediate expensing of up to $1.5 million annually for eligible capital investments;
• Lowering high Business Education Tax (BET) rates by $450 million for over 200,000 employers, or 94% of all business properties in Ontario;
• Reducing the small business Corporate Income Tax rate to 3.2%;
• Lowering electricity costs by 15 to 17% in 2022 for medium‐size and larger commercial and industrial customers under the Comprehensive Electricity Plan, and;
• Removing Tolls on Highways 412 and 418.
The Retail Council of Canada was not expecting major developments for retailers and businesses in the Fall Economic Statement. We continue to advocate on several issues of relevance to retailers, including labour reform and portable benefits, energy rates for business customers, immigration, and alcohol retail expansion to name a few. We are hopeful that there will be movement on these files and others in the near future.
For more information, please contact:
Director, Government Relations (Ontario)