Promoting Job Creation by Reducing Taxes on Employers

Published on November 12, 2020

The government highlighted the concrete action it is taking as part of the Ontario’s Action Plan: Protect, Support, Recover to eliminate a tax on jobs and reduce unfair tax rates for small businesses in the province. The 2020 Ontario Budget also proposes to provide municipalities with the flexibility to target property tax relief to small businesses, which the Province would consider matching.

Back in March, we more than doubled the Employer Health Tax exemption to $1 million. We have heard from employers across Ontario that this measure helped them keep workers on the job during COVID-19.

Now is not the time for anybody, anywhere, to impose or increase new or higher taxes on jobs. So, we are proposing to make this exemption increase permanent. That means an additional 30,000 Ontario employers will no longer pay this tax. But that is just the start.

We heard loud and clear that levelling the playing field and addressing unfair property tax rates is one of the most important things we can do to immediately support employers now and in the future.

Property taxes are one of the most unavoidable costs businesses face. They must be paid, even when business is slow, as it has been for so many this year.

In Ontario, there is a wide range of Business Education Tax rates across the province - despite promises made by governments over the last 25 years to fix this inequity.

This creates an unfair challenge for businesses operating in communities where the rates are higher. We are acting immediately to reduce these high rates by $450 million in 2021. Rates will be reduced to 0.88 per cent. For many employers, this represents a reduction of 30 per cent. Over 200,000 business properties, or 94% of the provincial total, are going to benefit, starting January 1st.

We have also heard from many municipalities, including Mayor John Tory in Toronto, that they want the flexibility to provide targeted relief to the businesses in their communities that need it the most during these tough times. So, we are proposing to empower municipalities with a new tool to provide a property tax reduction for their small businesses. Ontario will match these municipal property tax reductions to further reduce taxes on jobs.

For Ontario to recover, we need strong and sustained economic growth. We cannot expect our economy to just bounce back and the lost jobs to return on their own.

We need to start working on our recovery now and for the future. That’s why we are protecting and creating jobs now by reducing and eliminating taxes on jobs.

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