Report Estimates Benefits Of Ontario's Tax Plan
Proposed HST and 2009 Ontario Budget Measures Would Create Jobs, Increase Investment and Raise Incomes
A report released today by economist and tax expert Jack Mintz states that a harmonized sales tax combined with Ontario's proposed corporate income tax cuts and other recent tax changes would significantly increase jobs, boost capital investment and lead to higher annual incomes for Ontarians.
The report predicts that over the next 10 years, as a result of these tax measures, Ontario would see:
- 591,000 net new jobs
- Increased capital investment of $47 billion
- Increased annual incomes of up to 8.8 per cent, or $29.4 billion.
The report concludes that, as a result of major tax reforms, Ontario would become more competitive internationally, with a lower tax burden on new investment compared to the average of 20 major industrialized and emerging economies.
And it states that small businesses would benefit substantially as the effective tax rate on their business investment would fall by more than half from 28.6 to 13.3 per cent.
Jack Mintz is the Palmer Chair of Public Policy at the University of Calgary.
The report was commissioned by the Ontario Ministry of Finance through a competitive procurement process.
- The harmonized sales tax (HST) is just one part of a comprehensive tax package that would also provide, over three years, $10.6 billion in direct payments and permanent tax relief to the people of Ontario and $4.5 billion in tax relief to businesses.
- Consumers would not have to pay the Ontario portion of the HST on some items currently exempt from RST - children's clothing and footwear, diapers, kids' car seats and booster seats, books (including audio books) and feminine hygiene products.
- As under the federal Goods and Services Tax, the HST would not be charged on items such as basic groceries, prescription drugs and medical devices.
- The HST would result in the removal of $4.5 billion a year in embedded sales taxes when fully phased in.
“The Budget measures will have a profound impact on the willingness of business to invest in Ontario. The much lower tax burden on capital in the province will affect not only its competitiveness but also that of Canada as a whole.”
“We're making important changes to create jobs and put Ontario back on its feet. We can't afford inaction.Our package is about creating more jobs, making businesses competitive and putting money back into peoples' pockets through tax cuts.”