Sousa to unveil tax cuts for small businesses in budget update
Ontario’s finance minister is set to deliver an election-ready fiscal update that will give businesses with fewer than 100 employees tax breaks to offset a higher minimum wage, the Star has learned.
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Finance Minister Charles Sousa is set to deliver an election-ready fiscal update that will give small businesses significant tax breaks to offset paying employees a higher minimum wage, the Star has learned.
In Tuesday’s fall economic statement, Sousa will announce that corporate income tax rates for small business owners will drop to 3.5 per cent from 4.5 per cent on January 1.
That’s the same day the $11.60-an-hour minimum wage jumps to $14 before it rises to $15 in 2019.
Sources say Sousa will announce more than $500 million in new initiatives to help companies with fewer than 100 employees, including $124 million over three years to hire and retain workers between the ages of 15 and 29.
That could allay fears expressed by some business groups that raising the minimum wage could cost the province between 50,000 and 90,000 jobs.
The treasurer will also improve the existing apprentice training tax credit so that it encompasses more trades and increases the number of apprenticeships for minority groups, who are under-represented in many sectors.
Currently, about 120 of Ontario’s 150 skilled trades — in construction, manufacturing, mechanics, and industry — are eligible for the tax credits.
Those credits are available to businesses that have permanent establishments in Ontario, pay provincial income tax, and incur legitimate expenses in training apprentices in skilled trades.
In a major speech to the Toronto Region Board of Trade luncheon last Tuesday, Sousa signalled he would have good news for Ontario business operators “to help them improve their bottom line.”
“I will be announcing a whole set of new comprehensive initiatives to help small businesses in Ontario reduce costs and become even more competitive,” the finance minister said.
“Ontario’s balanced plan is helping build a fairer, more inclusive province. But our work is not done,” he emphasized.
“Despite a strong economy, too many are still facing challenges. Behind the robust economic growth, we know that people are feeling uncertain about their economic future. The rising tide has not raised all boats.”
That’s why the Liberals are increasing the minimum wage to help the nearly 30 per cent of workers who make less than $15 an hour.
“Economists remind us that nearly every minimum wage dollar earned will be directly spent. A higher minimum wage will help people get ahead and fuel our economy,” he said last week.
The treasurer will also use the annual fall economic statement to tout the fact that Ontario’s books are still in the black heading into the June 7, 2018 election.
“I will confirm that we will balance the budget. In fact, last year we beat our targets by just over $3 billion. And I will confirm that we are on track to deliver balanced budgets for the next two years as well,” he said.
“The 2017 fall economic statement will further outline our plan to create fairness and opportunity during this period of economic change.”
With a surplus in the treasury, Sousa said last week that $155 million will be spent over three years on a “seniors’ strategy.”
That includes a new website for seniors to more easily access information on drug coverage benefits, recreation programs, volunteer opportunities, tax credits, and powers of attorney.
Starting next fall, there will be a free high-dose flu shot designed especially for the elderly.
As well, Queen’s Park will spend more than $15 million over the next two years to upgrade apartment buildings that have become “naturally occurring” retirement communities because so many seniors choose to live in them.
With polls showing Premier Kathleen Wynne is in a tight contest against the front-running Progressive Conservative Leader Patrick Brown, Sousa is eager to showcase that Ontario’s economy is performing well with unemployment at 5.9 per cent.
“Our government’s efforts have helped, but it is mostly due to the hard work of the people of Ontario. Make no mistake: businesses created 800,000 net new jobs since the recession,” he said.
“For the past three years, we’ve outperformed all G7 nations, including the United States, Germany and Japan. And independent, private sector economists are projecting that Ontario’s steady growth will continue.”