Manufacturing sector set to benefit from HST

While there’s been a lot of backlash regarding the new HST — set to roll out in Ontario and B.C. on July 1 — there are plenty of benefits to businesses and, particularly, the automotive sector.

According to the Government of Ontario, the new combination of taxes will help strengthen the automotive industry by:

• Reducing the Corporate Income Tax rate for manufacturers to 10 per cent from 12 per cent.
• Reducing the Corporate Minimum Tax rate to 2.7 per cent from 4 per cent.

The government is hoping that the reduced tax burden will attract business to Ontario’s automative sector, allowing the sector to continue to be competitive in the global market and retain or create jobs. Automakers will also receive more input tax credits for the HST paid on most business costs and investments. These input tax credits will allow the auto sector to reduce costs and become more competitive, the government says.