Ontario provides relief for small businesses
Ontario will slash small business taxes and offer millions in incentives aimed at easing the transition to an increasing minimum wage as the Liberal government heads for a spring election.
Finance Minister Charles Sousa unveiled the plan in the province’s fall economic statement Tuesday. 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 have called for the tax offsets for months to allow businesses to absorb the cost of the wage hike. 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 onethird of its procurement spending on goods and services will come from small and medium-sized 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.
The province’s Financial Accountability Office has estimated more than 50,000 people could lose their jobs due to the minimum wage increase. A FAO report said 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.
Progressive Conservative critic Vic Fedeli said the government’s offsets will do little to address the impact the minimum wage hike will have on small business. The economic update is “nothing more than a pre-election Hail Mary pass from an out-of-touch government saying anything to cling to power,” he said.
In a surprise move, the Progressive Conservatives announced a significant policy promise, that the party will slow the implementation of the $15 minimum wage increase. The party will increase the minimum wage by 25 cents every year from 2018 to 2022, when it would reach $15.