The Ontario government is proposing to give municipalities the flexibility to target property tax relief to small businesses. The province is also considering matching these reductions, which would provide small businesses with as much as $385 million in municipal and provincial property tax relief, officials said in a media statement issued Tuesday.
Through the budget, the government previously announced that it will level the playing field by lowering high Business Education Tax (BET) rates for over 200,000 employers, or 94 per cent of all business properties in Ontario, starting January 1, 2021. This is expected to create $450 million in immediate annual savings and represents a reduction of 30 per cent for many businesses currently subject to the highest BET rate in the province.
“Time and time again, we have heard that unfair property tax rates in some parts of the province are creating barriers to job creation and growth,” said Finance Minister Rod Phillips. “We heard loud and clear that levelling the playing field and addressing unfair property tax rates is one of the most important things we can do to support small business in our communities.”
Taken together, these property tax measures could mean a business like a bakery shop in Toronto could receive $5,000 in municipal tax relief and $4,000 in provincial property tax relief if the local government applies a 30 per cent discount with the proposed new small business property subclass. Combined with a $1,500 BET reduction, this bakery shop owner would receive a total of $10,500 in property tax savings in 2021, officials explained.
Earlier in March, the government more than doubled the Employer Health Tax exemption to $1 million for 2020. Employers across Ontario have indicated that this measure helped them keep workers on the job during COVID-19. Ontario’s 2020 Budget proposes to make this exemption increase permanent. That means an additional 30,000 employers would no longer pay this tax.
The Ontario government is also helping main street businesses stay open and stay safe by offering a grant of up to $1,000 for the costs of personal protective equipment (PPE), with applications for the $60-million Main Street Relief Grant becoming available online on November 16, 2020.
Small businesses with two to nine employees in the retail, accommodations and food services, repair and maintenance, and personal and laundry services sectors can apply for this one-time grant.
Eligible businesses, whether applying for the Main Street Relief Grant for PPE or for property tax or energy rebates in affected regions, will be able to do it all through one application on a new online portal. For more information, please visit ontario.ca/smallbusiness.