Home Canadian News Ontario pleased with federal economic update, will match corporate tax cuts

Ontario pleased with federal economic update, will match corporate tax cuts

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The Ford government says it’s “pleased” with the corporate tax cuts rolled out in Ottawa’s fall fiscal update and will match the changes provincially.
“We welcome the federal measure to allow businesses to accelerate their expensing of depreciable assets. This is a very big deal,” provincial Finance Minister Vic Fedeli told a news conference late on Wednesday.
Under the federal plan, the government will allow Canadian businesses to completely write off the cost of manufacturing machinery and certain “clean energy” equipment in their tax bills, and to write off a larger share of newly acquired assets in the first year of purchase.
The changes were introduced to try to match U.S. President Donald Trump’s tax changes, which reduced Canada’s competitiveness with the United States. Ottawa’s tax changes don’t fully match Trump’s, which allow businesses to fully write off investments in their plants and equipment.
According to the federal government, the corporate incentives will collectively lower the marginal effective tax rate on new business investment in Canada from 17 to 13.8 per cent, which would be the lowest overall rate among G7 nations, including the United States.
The province says it will immediately match the tax changes through its own fall fiscal update tabled last week. Fedeli said the loss in revenues was already calculated into Ontario’s new deficit figure of $14.5 billion.
The Ford government also called on Ottawa to reverse its small-business tax changes that federal Finance Minister Bill Morneau rolled out last year, and also axe its carbon tax. Given that both are marquis policy items for the federal government, expectations were low that those changes would be made.
“They get a partial thumbs-up on one item and two thumbs down on the other two,” Fedeli said.
Morneau’s spokesperson, Pierre-Olivier Herbert, dismissed Fedeli’s criticisms outright.
“Conservative politicians here in Ottawa and in some provincial capitals want to bury their heads in the sand and ignore what’s happening to the climate, and to the economy. We’re not going to let that happen,” Herbert said in an emailed statement.
“Canada is already one of the best places in the world to invest, and the measures announced today will ensure that businesses continue to invest in Canada, drive economic growth and create good middle-class jobs.”
iPolitics.ca