Ontario economic outlook statement benefits cities leaving rural sectors out in the cold
From CBC News http://www.cbc.ca/canada/ottawa/story/2007/12/13/ontario-econ.html
Ontario targets battered sectors for help
December 13, 2007
Ontario's Liberal government is dishing out new tax cuts for manufacturers and other businesses to boost sectors that have been battered by a high dollar and a slumping U.S. economy.
In his fall economic outlook, released Thursday, Ontario Finance Minister Dwight Duncan unveiled a $3-billion package of business tax measures and infrastructure investments.
"The Ontario economy has proven resilient in an increasingly challenging global economic environment," Duncan said. "However, certain key sectors, such as manufacturing, forestry, agriculture and tourism, face serious challenges."
The province has lost an estimated 180,000 factory jobs in the last three years, according to Canadian Manufacturers and Exporters.
Among the measures outlined in Duncan's outlook:
- $1.1 billion in tax cuts for business over three years
- $1.4 billion in new spending to build "strategic infrastructure"
- $300 million over three years to expand the land transfer tax refund program for first-time home buyers to include purchases of resale homes
- $150 million to help cattle, hog and crop farmers
- $50 million for investments in innovation
- $40 million to provide skills development for laid-off workers
- $30 million to boost tourism promotion
- Increasing the film tax credit rates, effective Jan. 1, 2008
The business tax cuts include the elimination of the capital tax on Jan. 1 for corporations that are mainly in manufacturing and resources.
The capital tax rate for all businesses will also be cut by 21 per cent, retroactive to Jan. 1, 2007. That's a two-year acceleration of the previous timetable.
The small-business deduction threshold will be boosted by $100,000 to $500,000. That measure is also retroactive to the start of the year.
The economic outlook said Ontario's growth over the next two years will be lower than forecast in last spring's budget. But it said the province should manage to avoid running a deficit.
The outlook calls for 2007-08 revenues of $94.1 billion. That's an increase of $2.6 billion from the spring budget.
The provincial government said the extra money is coming from higher corporate and personal income tax revenue and higher federal transfers.
Spending will rise by $2.2 billion to $93.4 billion.
That will leave a reserve of $750 million. If that's spent, the province's books will still be balanced — a $400-million improvement from the spring.
Premier Dalton McGuinty's Liberal government was re-elected with a majority in the Oct. 10 Ontario election.