Ont. of­fer­ing re­lief to small biz

Govern­ment look­ing to ease tran­si­tion to higher min­i­mum wage


TORONTO — With an eye to next spring’s elec­tion, On­tario’s Lib­eral govern­ment will slash small busi­ness taxes as part of $500 mil­lion in new in­vest­ments aimed at eas­ing the tran­si­tion to the prov­ince’s in­creas­ing min­i­mum wage.

Fi­nance Min­is­ter Charles Sousa un­veiled the govern­ment plan in the prov­ince’s fall eco­nomic state­ment Tues­day af­ter­noon. The cor­po­rate tax rate for small busi­nesses will fall from 4.5 per cent to 3.5 per cent ef­fec­tive Jan. 1, 2018, the same day the prov­ince will in­crease its min­i­mum wage from $11.60 to $14.

Crit­ics of the govern­ment’s sweep­ing labour re­form pack­age in­tro­duced in May have called for the tax off­sets for months to al­low busi­nesses to ab­sorb the cost. The govern­ment plan will even­tu­ally see min­i­mum wage jump to $15 an hour by Jan. 1, 2019.

“We will not back down from these com­mit­ments,” Sousa said. “An in­crease to min­i­mum wage can­not wait. Peo­ple can­not wait ... de­lay­ing an in­crease is de­lay­ing an in­crease.”

As part of the $500 mil­lion pack­age for small busi­ness, Sousa said the prov­ince will des­ig­nate that one-third of its pro­cure­ment spend­ing on goods and ser­vices will come from small and medi­um­sized busi­nesses by 2020.

The govern­ment will spend $124 mil­lion over three years to help com­pa­nies with fewer than 100 em­ploy­ees who hire youths aged 15 to 29. The govern­ment will pay in­cen­tives of $1,000 for each worker hired and an­other $1,000 for each worker re­tained for at least six months by a small busi­ness.

“We also want to help young peo­ple find mean­ing­ful em­ploy­ment,” Sousa said. “To find their first job, or take their first steps to­wards build­ing their ca­reer. And we want to sup­port small busi­nesses that hire these young peo­ple.”

The prov­ince’s eco­nomic watch­dog, the Fi­nan­cial Ac­count­abil­ity Of­fice, has es­ti­mated more than 50,000 peo­ple could lose their jobs due to the min­i­mum wage in­crease. A re­port from the FAO said job losses would be con­cen­trated among teens and young adults, while the num­ber of min­i­mum wage work­ers in On­tario would in­crease from just over 500,000 to 1.6 mil­lion in 2019.

Busi­ness groups have ar­gued that needed off­sets for busi­ness should have comes months ago.

“Busi­nesses will have started to in­crease costs, they will have started to let peo­ple go, they will have stopped hir­ing peo­ple that they might have hired be­cause they’re plan­ning now un­der the pre­sump­tion there is no off­set,” Karl Bauldauf spokesman for the The Keep On­tario Work­ing Coali­tion, which in­cludes the On­tario Cham­ber of Com­merce, has said.

A re­port from the coali­tion re­leased in Septem­ber said the risk of job losses due to the min­i­mum wage in­crease could be sig­nif­i­cantly re­duced if the govern­ment ex­tended the pol­icy pha­sein pe­riod. An eco­nomic anal­y­sis of the wage in­crease by the coali­tion con­cluded over 185,000 jobs could be im­pacted by the hike.

How­ever, many econ­o­mists sup­port the govern­ment move, say­ing hik­ing the min­i­mum wage boosts eco­nomic ac­tiv­ity and in­creases peo­ple’s pur­chas­ing power.

Tues­day’s eco­nomic state­ment also cov­ers a num­ber of pre­vi­ously an­nounced govern­ment pro­grams in­clud­ing its se­niors strat­egy, open­ing ap­pli­ca­tions for free tu­ition for post-sec­ondary stu­dents early and cre­at­ing 1,200 new hos­pi­tal beds across the prov­ince.

Sousa also con­firms On­tario’s 2018 bud­get will be bal­anced — as will bud­gets over the next two years.


Fi­nance Min­is­ter Charles Sousa un­veiled the govern­ment plan to of­fer re­lief to small busi­nesses to help ease the tran­si­tion of a higher min­i­mum wage in the prov­ince’s fall eco­nomic state­ment Tues­day af­ter­noon.

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