Ontario ‘mini budget’ proposes supports for small business, low-income workers and seniors

In preparation for a potential economic slowdown, the Doug Ford government’s mini budget proposes some supports for small businesses, seniors and low income workers but nothing new for education, health care or to help Ontarians with the cost of living.

Monday’s 2022 Fall Economic Statement (also known as the mini budget) tabled in the legislature by Finance Minister Peter Bethlenfalvy, included government proposals to help Ontario manage risk amid high inflation and emerging economic challenges.

“As we navigate these uncertain economic times, our government is enhancing its plan through new targeted measures that support families, seniors and small businesses,” said Bethlenfalvy

The Ontario government is expecting economic growth and job creation to slow considerably in the next two years 2024 and made short-term uncertainty its main focus.

The fiscal blueprint does project improving deficits — nearly coming to balance by 2025 — and includes a number of new tax measures targeted at small businesses and seniors, and changes to the Ontario Disability Support Program (ODSP).

It also features significant downward revisions to real GDP growth when compared to the 2022 budget passed in August.

The government is now forecasting real GDP growth at 0.5 per cent in 2023, 1.6 per cent in 2024 and 2.1 per cent in 2025. That’s down from previous projections of 3.1 per cent, 2 per cent and 1.9 per cent, respectively, in the budget.

The government is projecting a $12.9-billion deficit for 2022-2023, about $7.9 billion lower than previously stated in the budget. The reduction is due mainly to higher-than-expected tax revenue and GDP growth this year. The deficit is then expected to fall to $8.1 billion in 2023-2024 and $700 million the following year.

A similar trend is expected for job growth. While the province netted about 324,000 jobs this fiscal year, that’s anticipated to fall to just 38,000 next year — down from 153,00 in August’s budget. The finance ministry is forecasting around 100,000 net jobs to be created in 2024 and about 117,000 in 2025.

Highlights of the 2022 Fall Economic Statement include:

  • Providing 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.
  • Increasing the monthly earnings exemption of a person on the Ontario Disability Support Program (ODSP) from $200 to $1,000 per month. The province says this would allow the approximately 25,000 individuals currently in the workforce to keep more of their earnings and could encourage as many as 25,000 more to participate in the workforce.
  • Planning to adjust the maximum monthly amount for the Assistance for Children with Severe Disabilities program annually to inflation, beginning in July 2023.
  • Helping to manage rising costs for low-income people with disabilities by planning to adjust core allowances under the ODSP to inflation annually, beginning in July 2023.
  • Doubling the Guaranteed Annual Income System payment for all recipients for 12 months starting January 2023, a maximum increase of almost $1,000 per person in 2023. This is expected to help around 200,000 of Ontario’s lowest-income seniors.
  • Proposing to extend the cuts to the gas tax and fuel tax rates so that the rate of tax on gasoline and fuel (diesel) would remain at 9 cents per litre until December 31, 2023.

The province is also planning to invest an additional $40 million in 2022–23 in the Skills Development Fund for in-demand industries, as well as 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 or in early childhood education.

“We are in a time of elevated inflation that is straining household budgets by driving up prices on everyday goods and services,” said Bethlenfalvy. “But I am confident in the resilience of Ontario’s economy, its workers and its people. And I remain confident in our government’s plan to maintain our fiscal flexibility, so we can provide targeted support to people and businesses today, while building for the future.”

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here