Ontario focuses on tax breaks, reskilling in COVID-19 recovery budget [UPDATED]
By Manufacturing AUTOMATION
By Manufacturing AUTOMATION
Ontario released its 2020 budget Nov. 6 with an emphasis on businesses surviving the COVID-19 pandemic, including $4.8 billion to maintain and create jobs.
The province’s plan now sets out a total of $45 billion over three years – a record spend for the province that Premier Doug Ford says will equip people and businesses with health care assistance, tax breaks and other supports to recover from the pandemic.
That includes $13.5 billion to help individuals and businesses most affected by the pandemic to navigate the second wave of COVID-19.
Of that figure, the province is allocating $600 million in funding to support eligible businesses required to close or significantly restrict services due to enhanced public health measures, doubling its initial commitment of $300 million initially announced in October.
Here are some of the other announced supports of interest to the manufacturing sector:
The government plans to invest $180.5 million over three years to help workers affected by the pandemic to retrain and upgrade skills.
This includes allocating $100 million to Employment Ontario for skills training programs, $59.5 million over three years to support Ontario’s first micro-credentials strategy to help with quick retraining, and a redesign of the Second Career program to include workers laid off due to COVID-19.
The government also plans to continue using its Skilled Trades Strategy to challenge public misconceptions about the skilled trades and encourage employers to sponsor and hire apprentices.
As of Jan. 1, 2021, Ontario will subsidize about 85 per cent of the electricity bill for medium and large industrial companies, which the government says will attract more companies to set up shop in the province as it will save 14 to 16 per cent on rates.
That will amount to a $1.3 billion spend over the next three years, and the subsidies will continue in smaller increments until about 2040.
The province is proposing to make permanent the Employer Health Tax (EHT) exemption increase from $490,000 to $1 million, meaning that small businesses with payrolls under $1 million would not have to pay the tax.
The province estimates this means 90 per cent of employers will save a total of $360 million in 2021–22.
Ontario will also allow municipalities to cut property taxes for small businesses, and in turn the province will “consider” matching the reductions.
This could lead to small businesses saving up to $385 million in total municipal and provincial property tax relief by 2022–23, depending on municipal adoption.
Lowering the Business Education Tax (BET) rates for over 200,000 employers, or 94 per cent of all business properties in Ontario, is also on the docket. The rate would become 0.88 per cent and represent a reduction of 30 per cent for businesses.
The province will also provide eligible businesses in areas with modified Stage 2 public health restrictions – or, going forward, areas categorized as Control or Lockdown under the new system – with up to $300 million to cover costs associated with property taxes and energy bills.
This article was originally posted Nov. 6 and has been updated to reflect an announcement made Dec. 4.