We’re working to make Ontario the place to be when it comes to building your business. Tax credits, incentives and a workforce second to none are attracting investment and creating jobs in new and emerging sectors
Progress Report 2011: Economy and Families
The global recession was hard on economies around the world. We braced against the storm and together we got back on track. Our jobs are coming back and growth is returning.
No matter what sector you’re talking about, the challenges facing businesses are similar. And that’s why our tax reforms are so important. We’re doing the right things to make Ontario a much more attractive place for businesses to invest, and businesses have seen the benefits.
Tax Plan for Jobs and Growth
Our plan is creating a climate where businesses can thrive, create jobs and build innovative new products to sell to the world.
HST
The HST eliminated hidden sales taxes for most businesses. Combined with our business tax cuts and other measures, Ontario is now one of the most tax competitive economies for business investment among industrialized countries.
The move to the HST also eliminated over 5,000 pages of outdated rules, regulations and operating procedures.
Since the federal government now collects Ontario’s sales tax, taxpayers will save about $100 million a year by 2014–15. The HST is also saving businesses over $500 million a year in administration costs.
In total, about 83% of products and services purchased by consumers saw no new tax.
To provide sales tax relief, we also introduced point-of-sale exemptions for the provincial portion of the harmonized sales tax for items that are especially important to families such as:
Diapers and feminine hygiene productsChildren’s clothing and footwear Children’s car seats and car booster seats Books (including audio books) Qualifying prepared food and beverages sold for $4 or less Print newspapers A study by Professor Michael Smart estimates that during the first six months of the HST, about two-thirds of the sales tax savings to businesses were passed on to consumers through lower prices.
Did you know?
– More than 150 countries and five other Canadian provinces have a value-added tax like the HST.
Income taxes
As of January 1, 2010, 93% of Ontario income taxpayers pay less income tax because of a personal income tax cut included in our tax reform package.
The general corporate income tax rate went down from 14% to 12% on July 1, 2010, and will go down to 11.5% on July 1, 2011. By 2013, the general corporate income tax rate will fall to 10%.
The Ontario Corporate Income Tax and Capital Tax cuts, together with the Harmonized Sales Tax, will help cut the marginal effective tax rate on new investment in half. That will encourage businesses to invest and create jobs in Ontario.
We eliminated capital tax for all corporations in Ontario on July 1, 2010.
Did you know?
– Ontario families are saving an average of $355 on their income taxes.
Tax Credits for Families
Ontario Sales Tax Credit
To help low to moderate income Ontario families and single people with the sales tax they pay, providing up to $260 for each eligible adult and child in low-to-middle income Ontario families and single people Ontario Sales Tax Transition Benefit
Three payments of up to $300 for single people and $1,000 for families and single parents Payments sent in June 2010, December 2010 and June 2011 Ontario Energy and Property Tax Credit
For low to moderate income property owners or renters with their principal residence in OntarioPaid up to $900 for 2010 to help with property taxes and the sales tax on energyQualifying seniors received up to $1,025 for 2010Children’s Activity Tax Credit
Offsets the cost of activities and benefits over 1.8 million children to a maximum of $50 each (or $100 for a child with a disability)Northern Ontario Energy Credit
For low to middle income property owners or renters with their principal residence in Northern Ontario to help with the higher energy costs of living in the NorthPaid families up to $200 to help with 2010 energy costs; single people received up to $130Home and landowners
Newly constructed homes across all price ranges that are purchased as primary residences qualify for a rebate of up to $24,000. This rebate ensures that, on average, new homes priced up to $400,000 are not subject to additional tax compared to RST that was embedded in the prices of new homes.
First-time home buyers can get up to $2,000 back as a rebate on their land transfer tax.
Support for Investment and Jobs
We have provided significant support to encourage business investment in Ontario. Although the private sector slowed down, direct government support has helped leverage new capital investment and job creation. As of May 2011:
We have announced support for 36 projects through the Next Generation of Jobs Fund. This investment of $754 million leveraged more than $4.2 billion in industry investment and secured 9,184 high-skilled jobs. We have made loan commitments of more than $189 million to support innovative projects in 27 communities through the Advanced Manufacturing Investment Strategy since its launch. This investment leveraged $1.2 billion in new investments and secured more than 5,600 jobs. We have announced support of more than $105.4 million ($63 million in grants and $42.4 million in loans) through the Strategic Jobs and Investment Fund since its launch on June 4, 2010. This investment leveraged total industry investment of more than $1.5 billion and secured more than 2,600 highly skilled jobs. In 2010, we provided over $465 million in tax incentives to Ontario businesses undertaking research and development. This tax support helps them develop breakthrough technologies, products and services the world wants to buy. During the worst recession in a generation, we invested $4.8 billion to support Ontario’s auto industry — and we have benefited from this move. The investment preserved the approximately 85,000 direct jobs in the province’s auto sector and the 400,000 jobs indirectly supported by the industry. Since the sector’s restructuring in June 2009, Ontario’s auto industry has increased by over 8,000 jobs. Foreign Investment
In 2010, and for the second year in a row, the Financial Times of London ranked Ontario second only to California in North America as a recipient of foreign direct investment.
Ontario is first in North America when it comes to converting foreign investment into jobs with 11,210 new jobs from foreign direct investment projects.
In 2007–08, we attracted 42 international investment deals, which helped create or retain 6,898 jobs. Business missions to China, India and Pakistan supported the strategy. The missions generated more than 70 agreements to develop new trade, investment and educational opportunities for Ontario.
In 2008–09, we attracted 32 international investment deals, which helped create or retain 3,768 jobs.
In 2009–10, we attracted 42 international investment deals worth $1.3 billion, which helped create or retain 4,000 jobs supported by business missions to India, Israel and the West Bank.
Did you know?
– The Financial Times of London named Toronto one of the two most attractive business cities in North America, along with New York.
To learn more about how the McGuinty government is attracting investment and creating jobs including incentives and programs for the arts and creative sectors, tourism and small business please visit: http://www.ontario.ca/en/initiatives/progressreport2011/ONT05_039144.html?openNav=economy_and_families