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Province’s small business tax cut “not enough” says DBOT

November 17, 2017   ·   0 Comments

By Jasen Obermeyer

The Ontario government’s announcement this week that small business will get a one percentage point tax cut and incentives to hire and retain young workers, in the wake of Bill 148’s minimum wage increase, has caused the Dufferin Board of Trade (DBOT) to speak out.

The government announced Tuesday  that it will cut its corporate tax rate on the first $500,000 of profits from 4.5 per cent to 3.5 per cent, beginning Jan. 1, the same day minimum wage goes up to $14 an hour. The wage increase is to further rise to $15 an hour by Jan. 1, 2019.

Nick Lumia, DBOT’s communications and research coordinator, says these hiring incentives and offsets are “not nearly going far enough,” to help small businesses adjust to the wage increase.

Small businesses with fewer than 100 employees will get an incentive of $1,000 to hire a young person aged 15 to 29, and another $1,000 if the company retains that worker for six months.

The tax cut still leaves Ontario with the third-highest small business tax rate among the provinces. The corporate tax rate, which applies to profits above $500,000, is 11.5 per cent, which is second lowest in the country.

Mr. Lumia says the Ontario government needs to do an economic impact analysis. He says DBOT did an analysis where if the minimum wage increase were delayed by five years, it would reduce the jobs at risk by 74 per cent. “It demonstrates that [the government] haven’t really listened to the concerns of business.”

He adds that businesses in Dufferin County are concerned about “keeping their doors open and making payroll,” and “nothing has really changed” that will “help our business with transitioning the realities of this bill.”

Mr. Lumia says they haven’t reached out to the small businesses yet, but he “wouldn’t be surprised if there really isn’t much change in the opinion of our business owners that this is going to have serious, unintended consequences.”

He says that there needs to be broad amendments, because “the minimum wage is one part of this, but there’s also the scheduling changes. … There’s a whole host of concerns that we’ve raised.”

         

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