What you need to know about Ontario’s 2022 Fall Economic Statement
On November 14, 2022, the Ontario government released its 2022 Fall Economic Statement that includes some positive measures for Ontario small businesses, including key CFIB asks!
Extending gas and fuel tax relief
The Ontario government has extended the temporary reductions to the gas tax and fuel tax for another year. This means that the gas and fuel tax will continue to be 5.7 cents/litre and 5.3 cents/litre lower until December 31, 2023.
Expanding eligibility for the small business deduction
The Ontario government will move to mirror the federal government’s improved access to the small business deduction by increasing the provincial Small Business Tax Rate phase-out range maximum from $15 million to $50 million.
Incentivizing more municipalities to adopt a small business property subclass
The Ontario government has committed to automatically match property tax reductions for small businesses in municipalities that choose to adopt a small business property subclass. Municipalities may set the reduction up to 35% of the municipal tax rate for the commercial and/or industrial property class.
The government hopes this will encourage more municipalities to follow in Toronto’s and Ottawa’s footsteps, the only two municipalities so far to have created a small business property subclass. In both cities, this subclass is providing a 15% reduction in the municipal tax rate for eligible small business properties starting in 2022, with Ottawa’s being spread equally over two years. The province decided to match the Toronto and Ottawa property tax reductions with corresponding education property tax decreases.
In a CFIB September 2022 survey, 69% of Ontario members agreed that their municipality should adopt a small business property subclass.
Reducing red tape
The Ontario government will establish consultation groups made up of representatives from key industries to share ideas on how the province can continue to reduce red tape and administrative burden across government.
Allowing immediate expensing of certain capital investments
The provincial government is temporarily allowing eligible businesses to immediately expense up to $1.5 million per year for certain capital investments. Ontario is providing this support in parallel with the federal government under the common federal-provincial income tax base.
CFIB’s next steps
Heading into pre-budget season, CFIB will continue to urge the Ontario government to maintain a ‘do no harm’ approach and not introduce any new costs on small businesses. We will also keep asking the provincial government to implement measures such as increasing the exemption thresholds for the Small Business Tax Rate and Employer Health Tax and indexing them to inflation annually.