Dissecting the province's Fall Economic Outlook

Recently, the Government of Ontario released its 2019 Fall Economic Statement entitled, “2019 Ontario Economic Outlook and Fiscal Review: A Plan to Build Ontario Together”, which provides an update on the government’s finances and announces commitments for the upcoming 2020 Budget.

SMALL BUSINESS
The government announced plans to:

• Cut the small business Corporate Income Tax (CIT) rate to 3.2 percent from 3.5 percent, starting January 2020.
• Develop an “Ontario Small Business Success Strategy” in which it will host consultations to better identify the needs of small businesses.

OCC Response:
We would have preferred to see a revenue-neutral restructuring of the Small Business Deduction (SBD) to encourage scaling up of small businesses. This would provide businesses with the right incentives while avoiding a loss in government revenues.

The OCC and Ontario Chamber Network look forward to participating in the consultations as the government works to develop the “Ontario Small Business Success Strategy.”

Peterborough Chamber Response:
We will also be working with our members to relay red tape reduction ideas and participate in the development of the "Ontario Small Business Success Strategy".

COMPETITIVENESS
The government announced plans to:

• Form a Premier’s Advisory Council on Competitiveness to consult with business and make recommendations on improving Ontario’s competitiveness.

OCC Response:
The OCC looks forward to participating in these consultations with government.

REGIONAL ECONOMIC DEVELOPMENT
The government announced plans to:

• Consult on ways to encourage investment into rural and undercapitalized areas of the province.
• Engage with rural stakeholders on the proposed Ontario Regional Immigration Pilot.
• Conduct a series of consultations with rural stakeholders on economic development challenges and opportunities in their regions - first session at the 2020 Rural Ontario Municipal Association conference.

OCC Response:
The OCC supports measures to improve access to capital for businesses in rural regions. In The Great Mosaic: Reviving Ontario’s Regional Economies, we recommend introducing a Rural Investment Tax Credit (RITC). 

The OCC supports efforts to encourage immigrants to live and work in rural and Northern communities, adding more skilled workers to communities where they are needed most.
The OCC and the Ontario Chamber Network look forward to participating in the government’s consultations with rural stakeholders to address economic development challenges and opportunities.

Peterborough Chamber Response:
The Peterborough Chamber contributed to the OCC's The Great Mosaic report and is currently developing a policy paper with recommendations to encourage more regional collaboration.

INDUSTRIAL ELECTRICITY
The government has announced plans to:

• Simplify industrial electricity billing and introduce advisory services to assist businesses with navigating regulatory approvals and connection issues. The government will also direct the IESO to retain an independent third party to undertake a targeted review of existing generation contracts for opportunities to reduce electricity system costs.

OCC Response:
Industrial electricity rates are one of the top factors affecting business competitiveness in Ontario. While the OCC is pleased with commitments to review existing generation costs and help businesses navigate the electricity system, more can be done to reduce industrial electricity rates. In particular, we would like to see the government consider revisions to industrial rate structures to support businesses that have not benefited from existing programs, as recommended in our submission on industrial electricity rates.

Peterborough Chamber Response:
We have long been a proponent of the request to develop programs for businesses that have not benefited from existing programs.

TRANSPORTATION
The government has announced plans to:

• Propose legislation to reduce the aviation fuel tax rate in North Ontario to 2.7 cents per litre from the current 6.7 cents per litre, returning it to 2014 levels. This change would take effect on January 1, 2020.

OCC Response:
Between 2014 and 2016, Ontario’s aviation fuel tax increased by nearly 150 percent, making it the highest in Canada. This acts as a financial barrier to many of Ontario’s attractions, particularly in northern and remote
communities, where other forms of travel may be infeasible for visitors. While this announcement is a good first step, the OCC would like to see the aviation fuel tax in all communities be lowered to match other Canadian provinces.

CLIMATE CHANGE
The government announced plans to:

• Begin its first ever assessment of how climate change will affect Ontario’s economy, infrastructure, communities, public health and safety, and ecosystems.

OCC Response:
The OCC applauds this decision. An assessment of climate change impacts will enable the province to take meaningful steps to protect Ontarians and the economy.

Peterborough Chamber Response:
We are also very excited about this opportunity.

WHAT’S MISSING?
The OCC would have liked to have seen new announcements in the following areas:

• A commitment to streamlining public funding programs and removing regulatory barriers that limit private sector investment in high-speed broadband internet.
• With the dissolution of the Ontario College of Trades, further details on what the stewardship process looks like for apprentices and journeypersons.
  • The Peterborough Chamber of Commerce is also very curious and looking forward to how we can inform changes in this area.

Read the full Fall Economic Outlook