Reducing costs for small business part of government’s plan to fuel job creation
Ontario has fulfilled its promise to cut the small business Corporate Income Tax (CIT) rate by 8.7 per cent by reducing the rate to 3.2 per cent effective January 1, 2020. Supporting small businesses is part of the government’s plan to attract investment and enable entrepreneurs and risk takers to grow their businesses and create high-paying, good quality jobs.
“Ontario has tremendous opportunity and potential, and we are working to create the conditions for job creators to grow and succeed. An important part of our plan is to reduce the tax rate for small businesses, as they play a vital role in the economy,” said Rod Phillips, Minister of Finance.
This tax cut will deliver up to $1,500 in annual savings to more than 275,000 businesses – from family-owned shops to innovative start-ups. Overall, Ontario’s small businesses are saving $2.3 billion in 2020 through government actions such as cancelling the cap-and-trade carbon tax, supporting Workplace Safety & Insurance Board premium reductions, providing Ontario income tax relief and other measures. To date, the government has also taken over 100 actions to cut red tape for businesses. These and other expected measures would save businesses $400 million in compliance costs.
“A lower small business tax rate is a welcome way to kick off the new decade,” said Julie Kwiecinski, Director of Provincial Affairs for Ontario at the Canadian Federation of Independent Business. “The move will help make doing business in Ontario more affordable, providing extra money for job creators to use where it’s most needed.”
To continue to build on these steps, the government is consulting with industry and business leaders to inform its Small Business Success Strategy.