Mcguinty Government Provides Almost $2 Billion In Tax Relief For Business
Manufacturers to Receive $190 Million in Rebates from 2008 Budget
Ontario businesses will benefit from tax measures that will lower business costs by nearly $2 billion over four years.
Today Bill 44, the Budget Measures and Interim Appropriation Act, 2008, passed third reading in the Ontario Legislature. Bill 44 implements key tax relief measures announced in the 2007 Economic Outlook and Fiscal Review and 2008 Budget.
These tax measures are a key part of Ontario's Five Point Economic Plan that will position Ontario for success by:
- Investing in education and skills training
- Keeping taxes competitive
- Moving towards a modern economy by supporting innovation
- Investing in infrastructure
Supporting economic development by forming key partnerships with the private sector
- Key elements of the Budget Bill include:
- Eliminating Capital Tax retroactive to January 1, 2007 for corporations primarily engaged in manufacturing and resource activities, entitling them to $190 million in rebates
- Providing a 21 per cent Capital Tax rate cut for all corporations retroactive to January 1, 2007, on the way to full elimination in 2010
- Increasing the small business deduction threshold to $500,000 from $400,000 – retroactive to January 1, 2007
- Enhancements to the Ontario Interactive Digital Media Tax Credit
- Increasing the film tax credit rates, effective January 1, 2008
- Extending the phase-out of the Labour-Sponsored Investment Fund tax credit and increasing the maximum eligible investment.
Other measures announced in the 2008 Budget include:
- A 10-year Ontario income tax exemption for new corporations that commercialize intellectual property developed by qualifying Canadian universities, colleges or research institutes
- An extension of an accelerated Capital Cost Allowance rate for manufacturing and processing machinery and equipment investments made before 2012
- Accelerating Business Education Tax (BET) rate cuts for northern businesses, resulting in total savings of more than $70 million over the next three years.
“The economy faces pressures right now that are beyond the control of any government, such as the slowdown in the U.S. economy, rising oil prices and a strong Canadian dollar. In the face of external challenges we are taking steps to strengthen Ontario’s long-term economic productivity, by stimulating investment and job growth through tax competitiveness.”
“This Budget is about ensuring that all Ontarians have the opportunities and skills to succeed, so that they are working in jobs that will strengthen Ontario’s economy. We will continue to implement our five-point economic plan and make new investments in the things we can control - skills training, infrastructure, education and innovation.”