Lower taxes, less red tape and more investment in productivity are on the wish list for business groups heading into Tuesday’s provincial budget.
In a pre-budget submission to the Ontario government made in February, one of the top priorities for the Canadian Federation of Independent Business was raising the exemption from the Employer’s Health Tax to $800,000. Currently, companies can only shield their first $400,000 in income from the 1.95% tax, which helps support Ontario’s health care plan.
"They haven’t changed the level since they brought in the tax. That’s ridiculous," said Satinder Chera, the CFIB’s vice president for Ontario.
Even if the exemption isn’t doubled, an increase of any kind would be welcome, Chera says, to keep in line with inflation indexing.
The CFIB is also calling on the government to hold off on planned increases in workers’ compensation premiums. Combined with the health tax, the increased WSIB premiums discourage companies from hiring new workers at a time when job creation is a high priority, Chera says.
Public sector workers and arbitrators are also in the CFIB’s cross-hairs. Arbitrated wage settlements in the public sector have been far too high for the province to afford, Chera argues.
"Imagine if you own a company, and you’re trying to compete with the government to hire someone. The government’s paying 20% more, and they’re doing it with your money. It’s insulting," he said.
The Canadian Manufacturers and Exporters, meanwhile, are calling for the complete elimination of the corporate minimum tax, which is currently set at 2.7% of earnings before interest, taxes, depreciation and amortization.
CME’s Ontario vice-president Ian Howcroft, however, knows that’s a tall order with the government also having to trim the deficit.
"We’re eternally optimistic, but looking at the tea-leaves, it doesn’t seem very likely," Howcroft admitted.
One area where Howcroft does expect more action is in the provincial government’s efforts to cut regulations for business. The Open for Business act passed in 2010 cut red tape in 10 different ministries; the CME wants the provincial government to go even further.
"We’ve had some success, but there’s still a lot of opportunity," said Howcroft.
Another big priority for the CME is the restoration of provincial funding for its SMART program, designed to help companies boost their productivity, with particular emphasis on information technology spending and energy efficiency. Companies apply to the SMART program for particular projects.
The program, administered by CME, was originally funded by a $25-million grant from the province in 2008. There was no new funding in last year’s provincial budget, but the federal government stepped in with a total of $20 million in funding in 2010.
