Ontario eyes changes to taxes on business
Update would ‘strengthen’ competitiveness
TORONTO The Ontario government put forward a fiscal and economic update on Thursday that the ruling Progressive Conservatives say is intended to try to restore the province’s edge when it comes to business taxes.
One section of the update tabled at the Ontario legislature says the province would mirror the federal government if Ottawa proposes to allow for accelerated expensing of new buildings or equipment, which is something that corporate Canada has been requesting.
“This would support jobs and growth opportunities in Ontario and strengthen Ontario’s competitiveness in the global economy,” noted the province’s 2018 economic outlook and fiscal review.
Ontario’s finance and economic development ministers had already written to the federal government pushing for initiatives such as immediate expensing. There have also been rumblings that the federal government is preparing some measures aimed at Canada’s competitiveness in its own upcoming fall update.
But Ontario’s update on Thursday warned that, in the aftermath of tax reform in the U.S., Canada’s most populous province has seen its “tax advantage” wiped out and that it has been made less attractive for business investment.
“If the federal government introduces a measure that accelerates the expensing of new depreciable assets, Ontario will parallel this measure,” the update said.
Yet in keeping with the work of new Premier Doug Ford, the Ontario update proposes to try to undo some of the work of the province’s previous Liberal government. For example, the Progressive Conservative government at Queen’s Park says it is proposing to break ranks with the feds on another measure: phasing out access to the federal small business tax rate based on how much passive investment income a corporation makes.
Ontario had proposed to match this measure for the province’s own small business tax deduction, which the government estimated would have hiked taxes on those smaller firms by about $160 million a year by 2020-21. Now, the Tories say they intend on abandoning this plan.
A press release from the Canadian Federation of Independent Business said they were pleased with the move, saying that Ontario’s decision makes it the first province to formally announce that it would not match the federal government on the tax change.
Ontario would also no longer “stand in the way” of pipelines transporting oil to or through the province from Western Canada, the update said. “In every way possible,” it added, “Ontario will support its partners looking to expand oil distribution, and at the same time, protect their competitiveness from the federal carbon tax.”
The update says Ontario will “respect” the recent Supreme Court of Canada ruling that was supportive of a co-operative national securities regulator.
Thursday’s update said that the Ford government is proposing to amend provincial legislation to allow for the regulation of financial benchmarks in Canada, such as the Canadian Dollar Offered Rate.