No tax relief for business in Ontario budget
Business groups disappointed they didn’t get the tax relief they were seeking, while smokers take another hit and municipalities are permitted to impose a tax on hotel stays and Airbnb-style short accommodations.

thestar.com
By LISA WRIGHT
April 27, 2017

Smokers, hotel guests and business owners weren’t exactly lit up by the budget that was tabled Thursday at Queen’s Park.

For starters, business groups are disappointed that long-awaited cuts to corporate and small business taxes weren’t addressed yet again in the Ontario budget, which they say was heavy on spending and very short on ways to generate revenue - outside the new sin tax on smokes over the next three years.

“There were a lot of important things in there to do with (improvements to) health care, education and infrastructure, but I don’t think a $10 tax on a carton of cigarettes is going to get them there,” said Dave Walsh, tax service line leader at accounting giant BDO Canada.

Smokers actually got a double whammy after Ottawa hiked cigarette taxes in the March federal budget, when the excise duty rate increased to $21.56 per 200 cigarettes from $21.03.

But Toronto Mayor John Tory got his wish granted after the province said it would allow municipalities to impose a tax on hotel stays and Airbnb-style short accommodations.

The Greater Toronto Hotel Association, the Ontario Chamber of Commerce and the Canadian Federation of Independent Business all oppose the tax.

However Tory kept pushing the province for the ability to levy a hotel tax after Premier Kathleen Wynne yanked the city’s power last January to toll the Gardiner Expressway and the Don Valley Parkway as he had planned.

“Corporate income tax rate relief - which the government paused following the economic downturn (in 2008) - was not reinstated again. We’re disappointed,” said Richard Koroscil, interim president and CEO, Ontario Chamber of Commerce.

He said not cutting corporate taxes jeopardizes “tens of billions of dollars in potential capital investment and hundreds of thousands of news jobs.”

While commending the government for finally balancing its books, he said the business community is concerned that the debt is ballooning and there is no plan for surplus, nor plans to begin debt repayment.

Julie Kwiecinski, director of provincial affairs (Ontario) at the Canadian Federation of Independent Business, said the finance ministry also ignored the group’s request to eliminate the small business tax over five to 10 years, and to reduce the general corporate income tax rate to 10 per cent from the current 11.5 per cent.

“At the current rate of 4.5 per cent, Ontario is saddled with the second highest small business corporate income tax rate in the country,” she said.

Meanwhile the Investment Industry Regulatory Organization of Canada (IIROC), CARP and Prosper Canada were pleased with proposed changes in the budget to the Ontario Securities Act that will give IIROC stronger enforcement powers, giving the regulator legal authority to pursue the collection of disciplinary fines directly through the courts.

“As a result, wrongdoers in Ontario will no longer be able to avoid payment simply by leaving the securities industry and abandoning their registration with IIROC,” the group said in a statement.

There is nearly $20 million in unpaid fines owing to IIROC in Ontario dating back to 2008.