The Ontario government released its budget: A Plan for Care and Opportunity.
Here's what it means for your business:
Ballooning debt and deficit
The government announced it will run a $6.7 billion deficit in 2018-19, breaking from its previous promise to run consecutive balanced budgets. The deficit will be driven by more than $20 billion in spending over the next three years. The government doesn't plan to get the books back to balanced until 2024-25.
The proposed deficit will add more than $30 billion to Ontario's provincial debt and increase annual interest payments on the debt to $17 billion per year in 2024-25.
Following the federal lead on unfair taxes
Ontario will parallel the federal tax proposals on income sprinkling and passive investment income which could not only have a serious impact on your taxes, but also put your access to the small business tax rate in jeopardy.
Minimum wage hike delivers big bucks to government
The government expects an additional $3 billion in personal income tax revenue next year thanks to the minimum wage increase.
Employer Health Tax (EHT) uncertainty
The budget looks to better align the EHT to small businesses but also indicates that 20,000 Ontario businesses will pay an average of $2,400 more in EHT per year, raising an additional $35 million for government beginning in 2019. CFIB is calling for a thorough consultation process before the changes take effect.
Personal Income Tax (PIT) changes
Effective July 1, the budget eliminates PIT surtaxes and would adjust income tax brackets accordingly. The result will be higher taxes for higher income earners. For example, an Ontarian earning $95,000 will see their tax bill increase by $168 per year.
Debt Retirement Charge finally retired
The government has finally removed the debt retirement charge from commercial hydro bills - a key CFIB recommendation on the energy file that will provide modest but much needed electricity cost relief.
Jobs and Growth Plan
The budget promises to enhance the Jobs and Prosperity Fund by $900 million over 10 years to provide financial support for businesses looking to grow. IN addition, the Ontario Training Bank would help connect you with talent and asses skills training needs. These measures address long standing CFIB recommendations to help alleviate the shortage of qualified labour.