The Conference Board of Canada’s Chief Economist Craig Alexander and Economist Daniel Fields offer the following perspectives/insights on Ontario’s Fall Economic Statement:
“With a surplus in their back pocket, the Ontario government felt the time was ripe for a sprinkling of election-friendly announcements including a cut to the small business tax rate and an assortment of minor program spending increases. Interestingly, the cut to the small business rate will launch at the same time as the hike on minimum wages. The recent announcements were funded through a combination of slightly better revenue growth and reduction in the contingency. The province continues to project zero surplus over the next three years.”
—Craig Alexander, Senior Vice-President and Chief Economist, The Conference Board of Canada.
- After nearly a decade in the red, the province has re-affirmed it will achieve a balanced budget in 2017–18.
- With a surplus in their back pocket, the province felt the time was ripe for some election-friendly announcements in the form of minor tax reductions and increased program spending.
- The reduction in the small business tax rate from 4.5 per cent to 3.5 per cent, will come into effect at the same time as the minimum wage increase, which should alleviate some of the pressures on small businesses.
- Minor program spending increases of $216 million were announced for 2017–18, mostly on early learning and child care as well as more support for small businesses.
- New program announcements were small as the balance is still in a delicate position. The province has the same balance targets as Budget 2017, but lowered the contingency each year by $100 million.