Budget does little to alleviate rising input costs or address low business confidence: Soo Chamber of Commerce
Sault Ste. Marie, ONTARIO March 29, 2018 (LSN) The Sault Ste. Marie Chamber of Commerce is deeply concerned that yesterday’s provincial budget does little to alleviate rising input costs or tangibly address low business confidence. In fact, the Ontario Government has chosen to follow the federal government’s lead on changes to the tax code that will result in significant new taxes on Ontario’s employer community at a time when businesses are still struggling to adapt to the significant labour and minimum wage reforms recently introduced by the government’s Bill 148.
The Ontario Government is harmonizing with the federal government’s eligibility criteria leaving over 20,000 employers paying $100 million more in Employment Health Tax over the next three years. In addition, businesses will be phased out of the small business deduction if they earn between $50,000 and $150,000 of passive investment income in the taxation year, resulting in an additional $350 million in new taxes for Ontario businesses over the next three years.
“Although the Government is making investments in skills development, the continued rising cost of doing business in Ontario is hindering economic growth,” says Don Mitchell, acting President of the Sault Ste. Marie Chamber. “The Ontario Budget not only fails to provide the offsets our members need, it will leave some businesses, including small businesses, paying more in taxes.”
The Ontario Chamber of Commerce (OCC) has expressed concern with the precarious fiscal situation that many of the Government’s new investments will create. While the near-term deficit is projected to be less than one percent of the GDP, this comes at a time when the economy is relatively strong. The budget also projects slower GDP growth on the horizon due to global factors.
Despite this caution, the OCC and the Sault Ste. Marie Chamber support investments announced in the Budget such as regional economic development funding, broadband infrastructure and additional resources for apprenticeship and skills development.
“We are pleased to hear that the government plans to invest $85 million over the next three years, increasing Northern Ontario Heritage Fund Corporation funding to $150 million in 2020–21 and introducing new NOHFC programs,” states Sault Ste. Marie Chamber of Commerce CEO, Rory Ring. “NOHFC plays a critical role in economic growth through job creation across northern Ontario and here in Sault Ste. Marie.”
The Sault Ste. Marie Chamber of Commerce welcomes news that the government has established plans to modernize the province’s apprenticeship system and also plans to invest $500 million over three years to expand broadband connectivity in rural and northern communities. A call to revamp Ontario’s apprenticeship program and advocating for expanded broadband access for rural and Northern Ontario to grow education and business opportunities have been central issues for the Sault Ste. Marie Chamber for several years.
However, despite a handful of positives in yesterday’s budget, Ring points out that Ontario businesses are facing significant challenges, impacting their competitiveness and growth.
He notes that, “our recent 2018 Ontario Economic Report revealed that nearly half of Ontario businesses report a lack of confidence in the province’s economic outlook and a CD Howe report released just last week indicates Ontario is on an unsustainable fiscal course. Ultimately, the government needs to be doing more to enable private sector growth; the bottom line is that your private sector is what funds the social and health programs that were announced in yesterday’s budget.”
The Ontario Chamber of Commerce adds that the impetus for much of the new social spending proposed by the Ontario government is to address the notion that prosperity is not being shared. Budget 2018 demonstrates that there is no rise in precarious work. As the Budget notes, of the more than 800,000 net new jobs created since the recession, the majority were created “in industries that pay above-average wages, in the private sector, and as full-time positions.”
“Ontario’s businesses are doing their part to create a fairer society, and the best way to ensure that continues is to consult with businesses and reduce their cumulative burden,” says Rocco Rossi, President and CEO of the Ontario Chamber of Commerce. “As the government and opposition parties turn their attention to the upcoming election, we again call on them to adopt our Vote Prosperity recommendations that will strengthen business competitiveness, foster job creation, build healthy communities, and improve government accountability.”