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Ontario budget 2016: Taxing the jobs for today and tomorrow

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TORONTO, February 25, 2016 – The Canadian Federation of Independent Business (CFIB) is disappointed that the Ontario government has once again ignored the province’s small and medium-sized businesses in the 2016 budget. Instead of acting on the concerns of its job-creators, the province is doing the exact opposite by forging ahead with new and higher taxes, disguised as a pension premium, a cap-and-trade plan and a wine sales expansion.

Ontario Retirement Pension Plan (ORPP):  Ninety percent of Ontario’s small businesses are opposed to the implementation of a mandatory ORPP, fearing it will have a devastating impact on their ability to keep and create jobs. Seventy percent will be forced to freeze or cut staff salaries, and about half will reduce positions and business investment. “Not only is the government completely ignoring small businesses’ ORPP concerns, it is also turning a blind eye on its own polling and research which clearly show that the ORPP will be a job killer,” said Plamen Petkov, CFIB’s Ontario vice president. “Delaying the first wave of ORPP implementation by a year was a good move, but relying on potential cuts in workers’ compensation premiums to offset the ORPP impact is neither prudent nor sufficient. At a minimum the budget should have pushed back ORPP implementation for small and medium-sized employers, which are still set to be hit with the new pension tax in 2018 and 2019.

Cap-and-trade:  Instead of taking pressure off of small business owners, the government is piling on more with a new tax, by another name. The budget outlines a cap-and-trade program which will add 4.3 cents to the price of a litre of gasoline and $5 per month on the average natural gas heating bill. “While big polluters play a credit trading shell game, Ontarians and small businesses will foot the bill for fighting climate change,” said Petkov. The gas and heating tax is expected to bring $1.9 billion annually to the government treasury and will not be revenue neutral.

Wine sales: The government is expanding wine sales to grocery stores, yet small retailers and convenience stores are shut out. “Ontarians expect more convenience, better service and fair pricing,” said Petkov. “Hiking the tax on wine to collect an extra $30 million in government revenue per year, and expanding wine sales only to a tiny number of hand-picked large grocery stores falls well-short of delivering on these expectations.”

Debt and deficit:  CFIB strongly supports the government’s commitment to balance the budget next year but remains very concerned with the steady growth in provincial debt. “Ontario’s record of being the world’s largest sub-sovereign borrower is nothing to be proud of,” added Petkov. “Hitting $300 billion in debt and paying $11 billion a year in interest payments requires Queen’s Park to start making tough decisions to rein in spending, instead of betting on higher revenues.”

Red tape reform:  The budget contains a list of good red tape reduction measures and re-affirms the government’s commitment to continue reducing the regulatory burden on small business.  “Unfortunately, any potential gains from cutting red tape will be completely offset by the impact the ORPP and the myriad of other taxes the government is eager to implement,” concluded Petkov.

To arrange an interview with Plamen Petkov, please contact Brett Hughes at 416-222-8022, ext. 2313 or [email protected].

CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.