Ontario Budget Provides Tax Relief for Small Businesses

On November 5^th, Ontario Minister of Finance Rod Philips tabled the government’s proposed 2020-2021 budget.  The budget contained a number of tax measures designed to assist small business owners.  Of particular interest to HRAI members are the following:

• Reduction in Business and Education Tax rate and Property Tax rate:  Starting January 1, 2021, the BET rate for more than 200,000 employers in Ontario will be reduced. In some communities, this could mean a reduction of up to 30% for many businesses.  Overall, the government projects that this measure will save the small business community approximately $450 million.
• Employer Health Tax: when the pandemic began, the government increased the exemption from the Employer Health Tax to $1 million – meaning businesses would temporarily no longer have to pay EHT on the first million dollars of their payroll. Budget 2020 makes this exemption permanent, effectively exempting about 90% of Ontario businesses from paying EHT.
• Commercial and Industrial Electricity Prices:  The government plans to save industrial and commercial ratepayers an average of 14% to 16% on their electricity bills by directly funding continued costs of existing energy contracts. At a cost of $1.3 billion over three years, the government is prioritizing lower electricity rates as a key competitive factor in the Province’s economic recovery.

For more information, contact Dorothy McCabe at 1-800-267-2231 ext. 274 or email dmccabe@hrai.ca.