By MPP Toby Barrett
Small business, agri-business and manufacturing across our area continue to strive for growth in market share, and by extension, boost our local economy.
A low dollar, coupled with gains in productivity and innovation bode well, however there appears little help for business from recently-tabled government budgets – both provincial and federal.
As profitguide.com described the Ontario budget “it’s likely to be remembered as one of the more inconsequential budgets in recent memory – at least from the perspective of Ontario’s business community.” This is not the kind of respect the engine of our economy deserves.
It’s not helpful that several business tax credits have been reduced. The Ontario Research and Development Tax Credit was cut from 4.5 per cent to 3.5 per cent, and the Ontario Innovation Tax Credit was cut from 10 per cent to eight per cent. The Apprenticeship Training Tax Credit is also under review.
Although the federal Liberals made an election promise to reduce the small business tax rate, it won’t be changing in the near future. A promise of an Employment Insurance holiday for companies hiring young people also wasn’t in the budget. Hiking the Canada Pension Plan contribution rate will also hit employers and employees.
Despite the expansion of the Canada Pension Plan, Premier Wynne is forging ahead with her Ontario Pension Plan. The increased overhead will put companies and their workers at a disadvantage. Locally, business owners tell me they too are concerned. The government’s own studies predict it will result in 30,000 lost jobs.
Ontario job projections have dropped drastically. In 2015, the government predicted 93,000 jobs would be created in 2016. Now, the projection is down to 78,000.
Visiting manufacturing plants from Courtland to Port Maitland, I’m told a lack of skills and a lack of worth ethic is common. Layoffs are a problem during slow times. On the employee side, I hear frustration from workers tired of temp agencies charging their services out to factories at a healthy rate and then paying little over minimum wage. Budgeting programs like the Business Growth Initiative, the Advanced Manufacturing Consortium, and the Workforce Strategy Panel could help.
An increase on tobacco taxes, and tying tobacco tax increases to inflation over the next five years, does not bode well for our legal tobacco industry.
Small retailers and convenience stores are shut out, as government expands wine sales to a small number of large grocery stores. The price of wine is going up, as well as the tax over coming years.
Farmers, truckers and the service industry will be hard hit by increased fuel taxes. Some businesses will be able to increase their prices – which are eventually passed on to the customer – but others take the hit.
Like home owners, businesses and industry are hit hard by Ontario’s skyrocketing electricity prices. For manufacturing plants that are intensive electricity users, the hit is especially hard. Many farmers and exporters must also compete in a global marketplace against counterparts paying less for electricity in just about every other jurisdiction in North America.
Support for our innovators, entrepreneurs and manufacturers should be front and center in each and every budget. It’s not, and was especially lacking in the recent provincial and federal budgets. This is the message I heard over and over during my company and shop tours in the past few weeks.