CFIB calls for measures to help Ontario's Manufacturers
For more details
Rx for Ontario’s Manufacturing Sector
Full Report
Appendix A – Manufacturing Survey
Appendix B – Volunteered Responses to Q-7
September 19, 2008
Hon. Dalton McGuinty
Premier of Ontario
Legislative Bldg, Room 281
Queen's Park
Toronto ON M7A 1A1
Dear Mr McGuinty:
As you and your colleagues take your places in the Legislature, I write to bring to your attention fresh CFIB research pertinent to Ontario’s economy and our manufacturing sector.
CFIB’s Business Barometer—Ontario is showing the business expectations of our manufacturing
members lagging behind those almost all other sectors. At the same time, many of our member
manufacturers have told us they are currently being hurt by everything from government imposed
costs, to energy and input prices, off-shore competition, and economic difficulties spilling over
from the United States.
To understand the challenges they are facing, CFIB recently conducted an e-mail survey among our
4,500 Ontario manufacturing members. Our research focused specifically on the sector’s issues and
what might be done to improve the business and investment climate for this traditional mainstay
of our provincial economy. The resulting CFIB report, Rx for Ontario’s Manufacturing Sector—
Should We Let the Patients Write the Script?, reflects over 500 responses from Ontario
manufacturers, the majority of whom are well established in business and are highly integrated
with the rest of the world.
In terms of prescriptions for their ills, manufacturers prioritize things that are squarely within
government’s control, recommending specifically a reduction in the enormous governmentimposed
tax and regulatory costs. About three-quarters of manufacturers think that tax relief is the
most appropriate form of government assistance to manufacturers as they try to weather the
present difficult economic conditions, as compared to about one-fifth who think that direct
subsidies (grants, loans) are the way to go, provided certain pre-conditions are fulfilled. Based on
this extensive research, CFIB has assembled a comprehensive set of recommendations aimed at
turning the corner on Ontario manufacturing distress. Some key ones include:
- A new approach to the way government regulates, changing from heavy-handed
enforcement to helping business owners comply with regulations. This means providing a
single point of contact to inform business owners of their obligations, training inspectors to
give compliance support, and waiving fines, penalties and back charges for first-time,
unintentional non-compliance of government regulations.
- Gear urgently needed tax relief to the taxes that fall due regardless of profitability, such as:
accelerating Ontario’s Business Education (Property) Tax (BET) reductions; levering
Municipal Property Tax reductions from the provincial-municipal review; raising the
Employer Health Tax (EHT) small business exemption; and ensuring the WSIB holds the line
on premiums.
- As a centrepiece of the Rx package for manufacturers, and taking account of the many and
varied needs in the manufacturing sector that emerged in our study, consider designing a
new mode of tax support: a flexible, refundable tax credit that could be applied to a wide
variety of taxes (e.g. payroll taxes, property taxes) or expenses (e.g. apprenticeship training,
foreign marketing trips, investments in equipment and tools, etc.)
- Improve Ontario’s climate for manufacturing investment and a more prosperous future by
setting out a Corporate Income Tax (CIT) relief plan, ensuring that we become and stay
competitive with neighbouring jurisdictions.
- If the government is determined to offer subsidy/loan programs as opposed to delivering
assistance through the tax system, it should make them even-handedly available to smaller
manufacturers on the same basis as larger ones.
CFIB is prepared to brief policy-makers—you and your colleagues in Cabinet, Caucus, and the
Legislature, as well as relevant government officials-- in greater detail on this study of Ontario
small- and medium-size manufacturers. We will also be bringing our findings and recommendations to the attention of Hon. Sandra Pupatello, Minister of Economic Development & Trade through our involvement in the newly-created Ontario Manufacturing Council.
It is our hope that this work will contribute to productive debate in the Legislature, and ultimately to a package
of measures to help Ontario’s small- and medium-size manufacturers weather current conditions and prosper over the long term in Ontario.
Sincerely,
Judith Andrew
Vice President, Ontario
Cc: John Tory, Leader of the Ontario Progressive Conservatives
Howard Hampton, Leader of the Ontario NDP
