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Ontario cuts business taxes, boosts apprenticeships

Don Wall
Ontario cuts business taxes, boosts apprenticeships

Construction stakeholders have expressed tempered appreciation of measures the Ontario government has taken to support small businesses in its 2017 Economic Outlook and Fiscal Review tabled Nov. 14.

Ontario Finance Minister Charles Sousa announced a small-business tax cut, a balanced budget for this year and the next two, and new programs to boost apprenticeship training in the government’s fall fiscal update.

The small-business tax rate will fall from 4.5 per cent to 3.5 per cent on Jan. 1, when the first of two stages of minimum wage hikes take effect. Sousa reiterated the government pledge to raise the minimum wage to $14 to start the new year and to $15 an hour on Jan. 1, 2019.

Ontario is forecasting real GDP growth of 2.8 per cent in 2017, higher than earlier predictions.

"The economy is stronger than predicted, there is more employment, there is more economic growth, there is more output," commented Ian Cunningham, president of the Council of Ontario Construction Associations. "I don’t know how much you can attribute that to public policy but if you had public policy that wasn’t supportive of investment and job creation and economic growth, you wouldn’t see GDP improving and employment numbers improving."

Referring to the tax reduction in the context of the boost to the minimum wage, Cunningham said, "It may not be a total offset but it is accommodative." Sean Reid, Ontario vice-president and regional director for the Progressive Contractors Association of Canada (PCA), said his association welcomed the initiatives to strengthen apprenticeships and also to promote the hiring of young people.

"The PCA is very supportive of any initiative by government to strengthen the workforce in our industry. For us the economic statement’s main message was a commitment from the government to strengthen Ontario’s workforce in skilled trades so we are appreciative of that.

"Obviously a significant base of the PCA membership in Ontario is small business so they are going to derive benefits from those tax cuts so that is very much welcome."

New youth career training initiatives include a grant called the Graduated Apprenticeship Grant for Employers (GAGE) that encourages employers to help apprentices complete their training programs, with bonuses at each of three apprenticeship stages.

The province is increasing apprenticeship opportunities for underrepresented groups also, such as women, indigenous peoples, francophones, people with disabilities, newcomers and visible minorities. The GAGE would provide a $500 bonus at each grant level when the apprentice belongs to an underrepresented group.

"The PCA and our members are particularly preoccupied with recruiting new workers from underrepresented groups into our workforce and recruiting generally into the workforce so the young worker focus was appreciated," added Reid.

Further on youth employment, Sousa announced that beginning in 2018, the province will provide $124 million over three years in supports for youths aged 15 to 29 for employer hiring and retention. A small business with fewer than 100 employees would receive a $1,000 incentive for hiring a young worker and a $1,000 incentive for retaining that worker for six months.

Other initiatives in Sousa’s three-year, $500 million package to support small businesses included a pilot program to improve access to financing and policies to provide better access to government procurement opportunities.

As part of the procurement plan announced in October, Ontario will designate 33 per cent of its procurement spending to small and medium-sized businesses by 2020, to be supported by initiatives to improve the process, making it easier for businesses to submit bids.

"Small businesses risk being left behind with some of the procurement trends we are seeing in the industry right now," said Reid. "Just recently I heard from some members about project bundling. That might make sense to a procurement officer in the bowels of an organization somewhere but not for most of the businesses, particularly the local businesses where the project might be built. So any recognition that small business and local businesses can’t be left behind, that is a good thing."

The finance minister also announced an expansion of Ontario’s Fair Housing Plan with rent control extended to all private market units in the province. The measure is in addition to recently announced recommendations from the province’s roundtable designed to speed up housing development approvals.

Cunningham wrote in a statement that the economic update was "clearly designed to set the table for the upcoming general election next June" with an appeal to more "centrist" voters, particularly small businesses concerned over the minimum wage increase.

"I’ll be watching for the post update polling to see if ‘A Strong and Fair Ontario’ has moved the needle for the floundering Liberals," Cunningham added.

Reid also commented on the overarching political message contained in the budget.

"The government is trying to signal it is trying to work with small business, it is not the domain of one party in the legislature," he said. "And to the extent the government believes in small business and believes in trying to support them and believes in trying to develop the skilled trades workforce, that is all good news for our members."

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