As expected, Ontario tabled its first balanced budget in a decade with just tobacco taxes being increased $10 per carton of 200 cigarettes over the next three years beginning with an immediate $2 per carton increase, effective April 28, 2017. The government also committed to balancing the budget for the following two years. This may prove to be a challenge with the level of uncertainty that is being created south of the border.
This was a budget to set the stage for next year’s provincial election and influence the voter.
As a run up to the budget, most of the budget’s content had been pre-released. Initiatives in the budget included the on-average 25% reduction in electricity prices for consumers and the 16-point plan to make housing more affordable. It also provided funding for child care, respite care, hospitals, infrastructure and a three-year basic income pilot program.
Retailers could benefit from the funding increase as consumers will have additional money in their pockets to spend.
Some of the less visible initiatives include the following:
Effective July 1, 2017, a seniors’ Public Transit Tax Credit for people aged 65 and older will be established. Details about eligibility for the credit will be announced prior to the implementation date.
The Province intends to conduct a policy, legislation and administrative review of all taxes. This review will identify and eliminate loopholes. Details of the review will be released over the next several months.
The Province will also be reviewing business structures to ensure that payment of Employer Health Tax (EHT) is not being avoided. The government wants to ensure that the EHT relief is targeted to truly the smaller employers.
The 2017 Ontario budget paper can be found here.
Moving forward the government plans to focus on giving businesses the tools they need to succeed by maintaining Ontario’s competitive corporate income tax rates, modernizing regulations and reducing business costs. In addition, the government will continue to support addressing the underground economy by introducing a sales integrity pilot project in the retail and hospitality sectors to test and evaluate security software that will identify businesses using electronic sales suppression technology.
RCC will continue to work with the government to ensure future business input costs are competitive in comparison with other jurisdictions to attract and maintain businesses in Ontario.
If you have any questions or concerns, please don’t hesitate to contact: Gary Rygus, Director Government Relations (Ontario) at: [email protected] or 416-467-3744