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93465 11 Nov 2020

Budget Measures to Reduce Taxes on Employers in Ottawa, Minister Lisa MacLeod Announced

Ontario's 2020 Budget levels the playing field by reducing unfair property tax rates and proposes to give municipalities tools to target property tax relief to local small businesses

Ottawa The Ontario government is giving municipalities the flexibility to provide property tax relief to small businesses. The province is also considering matching these reductions, which would provide small businesses with municipal and provincial property relief totalling $385 million. This initiative is part of the 2020 Budget, Ontario's Action Plan: Protect, Support, Recover.

Property taxes are one of the most unavoidable costs businesses face in Ottawa. They must be paid, even when business is slow, as it has been for so many this year. In Ontario, there is a wide range of Business Education Tax rates across the province - despite promises made by governments over the last 25 years to fix this inequity. This creates an unfair challenge for businesses operating in communities with higher rates.

The 2020 Budget also proposes to reduce property taxes on job creators and level the playing field by lowering high Business Education Tax (BET) rates for over 200,000 employers, or 94 percent of all business properties in Ontario, starting January 1st. This will create $450 million in immediate annual savings and represents a reduction of 30 percent for many businesses currently subject to the highest BET rates 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 Rod Phillips, Minister of Finance. "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 immediately support employers now and in the future.

Rates will be reduced to 0.88 percent. For many employers, this represents a reduction of 30 percent. In Ottawa, it means industrial properties will save a total of $27,931,000 (30%), and commercial properties will save a total of $5,336,000 (17%).

"Ottawa's third-largest industry is Tourism, and we have suffered as a result of COVID-19," said Lisa MacLeod Minister of Heritage, Sport, Tourism, and Culture Industries and Nepean MPP. "This announcement offers heritage, sport, tourism and culture operators relief at a time when we need to focus on recovery, rebuilding and eventually re-emerging as a global leader."

"We know that supporting businesses, and the people who run them, is an important part of the economic recovery as we move forward," said Dr. Merrilee Fullerton, Minister of Long-Term Care and Kanata-Carleton MPP. "Todays announcement addresses long standing inequities in the system and will support the hard-working people who are a vital part of our communities."

"This is great news for small business owners in Carleton," said Goldie Ghamari, MPP for Carleton. "Small business is the backbone of Carleton's economy. Unfortunately, they've lost a lot revenue over the last few months due to the pandemic. Lowering the Business Education Tax is a great way to help level out high property taxes for business owners to help them get back on their feet, recover from their losses, and succeed in the future."

"We appreciate the government's support of our brick-and-mortar businesses. Our members all share the same concerns of trying to cover fixed costs with decreased revenues," said Mark Kaluski, Chair of the Ottawa Coalition of Business Improvement Areas. "Finding fairness in the property tax system, increasing the Employer Health Tax exemption, and providing grant funding will help most of our businesses in meaningful ways through the long period of uncertainty, and well into our recovery."

"In this period of difficult economic times, our members welcome these changes to property and heath taxes that will help us survive and prepare for better times in the future," said Jim Sourges Chair of the Bells Corner BIA. "Although it has been a difficult period, we are all looking forward to the economic recovery ahead and we believe these policies will support our members and their employees moving forward."

In this period of difficult economic times, our members welcome these changes to property and heath taxes that will help us survive and prepare for better times in the future. Although it has been a difficult period, we are all looking forward to the economic recovery ahead and we believe these policies will support our members and their employees moving forward.

The government is also proposing to end a tax on jobs for an additional 30,000 employers. Back in March, the government more than doubled the Employer Health Tax exemption to $1 million. Employers across Ontario have indicated that this measure helped them keep workers on the job during COVID-19.

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 16th, 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.

"Ontario's landmark Budget the first delivered during a global pandemic in part focuses on what matters most to small businesses and will help establish a solid foundation on which they can reliably recover and rebuild," said Minister Sarkaria. "Partnering with municipalities to bring tax relief to our small businesses will strengthen our recovery and help our job creators weather this storm."

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QUICK FACTS

  • Ontario's Action Plan sets out a total of $45 billion in support over three years to make available the necessary health resources to continue protecting people, deliver critical programs and tax measures to support individuals, families and job creators impacted by the virus, and lay the groundwork for a robust long-term economic recovery for the province.
  • Ontario has also committed $300 million to provide eligible small businesses in modified Stage 2 public health restrictions, or, going forward, in areas categorized as Control or Lockdown to cover costs associated with property taxes and energy bills.
  • The province is also moving forward with introducing legislation to extend the temporary ban on commercial evictions for businesses that are eligible for federal/provincial rent assistance, as part of Bill 229, the Protect, Support, and Recover from COVID-19 Act (Budget Measures), 2020. If passed, the legislation would extend the ban on evictions for commercial tenants that would have been eligible for the CECRA for small businesses program.

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ADDITIONAL RESOURCES

2020 Ontario Budget/Ontario's Action Plan: Protect, Support, Recover
Recover: Creating the Conditions for Growth
Rent assistance for small businesses
Businesses: Get help with COVID-19 costs