On November 14th, Minister Bethlenfalvy released the 2022 Fall Economic Statement (FES) for Ontario titled “Ontario’s Plan to Build: A Progress Update”. This year’s Fall Economic Statement also includes a progress report on the Provincial government’s plan to build Ontario and focuses on building the economy, addressing the labour shortage and supporting families and businesses in keeping their costs down.
Ontario’s real GDP is projected to rise 2.6 per cent in 2022, 0.5 per cent in 2023, 1.6 per cent in 2024 and 2.1 per cent in 2025. The Fall Economic Statement projects a provincial deficit of $12.9 billion for 2022-23, $7 billion less than what was projected in the 2022 budget. The FES shows the government made about $186.8 billion in revenues, primarily from taxes and federal transfers. The government spending for 2022-23 is expected to be $198.8 billion.
Labour & Skills
- Investing an additional $40 million in 2022–23, for a total of $145 million for the latest round of funding in the Skills Development Fund.
- Investing an additional $4.8 million over two years, beginning in 2023–24, to expand the Dual Credit program, encouraging more secondary school students to enter a career in the skilled trades.
- Up to $2,000 per year in relief for 50 per cent of a person’s 2021 or 2022 eligible training expenses through the Ontario Jobs Training Tax Credit.
Chamber Analysis: The Vaughan Chamber of Commerce welcomes extended funding support towards skill development and promoting skilled trades. Our businesses have repeatedly expressed concerns over hiring skilled labour and their limited capacity to train. This will help with the skill shortage gap and improve the supply of a skilled, productive workforce.
We would also like to see the government take a sector and industry-specific approach to customize policy responses that meet the unique labour needs in different sectors e.g. automotive, manufacturing and health among others. The government also needs to streamline the skill recognition program to recognize international accreditations to help those willing to work but aren’t eligible under the current requirements. The Chamber suggests the Ontario government to intensify its collaboration with the post-secondary institutions to promote in-demand skills.
Small Business Support
- Providing Ontario’s small businesses with $185 million in income tax relief over the next three years, benefiting about 5,500 small businesses through the proposed extension of the phase-out of the small business tax rate.
- Automatically matching property tax reductions for small businesses within all municipalities that adopt the small business property subclass.
- $675 million in income tax relief to businesses over the next three years by temporarily allowing some to expense up to $1.5 million per year in certain capital investments.
- Widening eligibility for a reduced corporate income tax rate, allowing an estimated 5,500 businesses to save about $185 million.
- Proposing to extend the 5.7 cent per litre gas tax cut and 5.3 cent per litre fuel (diesel) tax cut for an additional year until December 31, 2023.
Chamber Analysis: The Vaughan Chamber is pleased to see the progressive measures introduced to support small businesses. As the majority of our local businesses are SMEs, we are aware of the many challenges they’re facing and have voiced their concerns through our advocacy and outreach. Over 59% of small businesses are still making less than their normal revenues. Whereas 42% of small businesses are struggling to repay their average pandemic related debt.
The tax reliefs and matching property tax reductions are a step in the right direction. The government’s commitment to automatically match small business subclass property tax reductions is particularly welcomed. According to a survey conducted by the Canadian Federation of Independent Business (CFIB), 69% of small businesses agreed to municipalities adopting a small property subclass.
The Chamber will continue stress the Ontario government to increase the exemption thresholds for small business tax rate and employer health tax and indexing them to inflation annually. This will help small businesses grappling with inflation and economic uncertainty. In tandem, supporting small businesses though a digitization programs will benefit the small businesses.
- Launching a voluntary clean energy credit registry to boost competitiveness, attract jobs and provide businesses with more choice in how they pursue their environmental and sustainability goals, as enabled by proposed legislation.
Chamber Analysis: The chamber continues to support measures that help businesses transition to net-zero practices. Supporting businesses to undertake the transition will make it more adaptable and sustainable. The energy credit will act as an incentive for businesses to switch to sustainable business practices.
While these measures are great, the Vaughan Chamber would like to see the government extending its support for the businesses by providing clear guidelines and expanding financial support. Along with that there’s a need to invest more in building transmission and distribution infrastructure.
• $159.3 billion in investments over the next 10 years for infrastructure, including about $20 billion in 2022-23. About $25.1 billion over 10 years will go toward highways, $61.5 billion into public transit and more than $40 billion into hospital infrastructure.
Chamber Analysis: The Chamber appreciates the increase in infrastructure funding for the province. Infrastructure improvements are critical for Ontario’s as well as York region’s economic growth and a modern, reliable infrastructure facilitates trade enabling businesses to utilize its maximum potential. To meet the current and future needs of the businesses it’s imperative to continuously invest in infrastructure.
Local Vaughan businesses will be encouraged to see the expansion of highways and public transit. This will not only mean productivity gains but will also address the barriers they face in attracting the workforce. These measures will encourage the mobility of both goods and labour for the York region.
Highlights from the Building Ontario Report:
• Attracted $16 billion in transformative automotive investments in Ontario by global automakers and suppliers of electric vehicle batteries and battery materials over the last two years.
• Attracted $2.5 billion in investments over the past year that will support transformation in the steel sector and help make the province a world‐leading producer of low‐carbon steel.
• Supporting an estimated $8.7 billion in cost savings and support for Ontario businesses in 2022, with $4.0 billion going to small businesses, through actions such as lowering payroll costs and providing electricity price relief.
• Continuing to support the skilled trades, with Ontario seeing over 71,700 new registrations in apprenticeship programs, more than 25,000 Certificates of Apprenticeship and 5,600 Certificates of Qualification between 2018 and 2020.
• Adding over 11,700 health care workers, including nurses and personal support workers, since 2020; as well as over 800 internationally educated nurses who have become licensed nurses in Ontario through government-funded programming.
• Approximately $25.1 billion in highway expansion and rehabilitation over the next 10 years to connect communities, fight gridlock and keep goods and people moving across the province, including building Highway 413 and the Bradford Bypass, and expanding Highway 401.
To read the full Fall Economic Statement, click here.