NDP HIKING TAXES ON SMALL BUSINESSES BY BILLIONSPublished on June 02, 2018
The Ontario NDP like to pretend they’re paying for their unaffordable spending spree platform by asking the wealthiest corporations to pay a bit more, but, in reality, the NDP are hiking taxes on the small businesses and mom and pop shops that form the backbone of our communities.
This morning, Vic Fedeli revealed that the NDP tried to bury a 12.7 per cent tax hike on small businesses.
This is in addition to the NDP hiking the Business Education Tax by $2.4 billion over five years, and the elimination of the Small Business Employer Health Tax Exemption costing businesses over $1 billion over the NDP’s five year plan.
“Small businesses are the backbone of our community. They are being pushed to a breaking point by an out of touch Wynne Liberal government, and it’s clear they can’t afford an NDP government that will be ten times worse,” said Fedeli. “Under an NDP government, businesses will have no choice but to bolt lock their doors, shutter their windows, and ship their jobs south of the border.”
The last time the NDP were in power, their uncompetitive policies killed 125,000 jobs, and hiked the unemployment rate by 28 per cent.
On the other hand, the Ontario PCs will bring relief to small businesses, and bring good-paying jobs back to the province. The Ontario PCs will reduce the small business tax rate by 8.7 per cent, scrap the carbon tax, and lower hydro bills by 12 per cent.
“Our plan is responsible and affordable. Our message to small businesses is change is coming and help is on the way.”
Backgrounder - NDP Raising Taxes on Small Businesses
June 2, 2018
- The NDP is proposing in their platform to raise the corporate tax rate from 11.5% to 13%. They will do so by raising the rate by 1 point (an 8.7% increase) in 2019-20 and by another half point (a 4% increase) in 2021-22. This totals a 12.7% increase.
- Andrea Horwath has repeatedly said we should “ask those at the very top to pay a bit more. It’s absolutely the right thing to do.”1
- What the NDP has not told Ontarians is they also plan to raise small business taxes by 12.7%.
- In Ontario, the small business tax rate applies to the first $500,000 a company earns.
- When the government reduced the small business tax rate by 22.2% they booked a fiscal cost of $150 million in 2019-20.2 That means the remaining small business tax revenue is worth roughly $526 million per year.
- In the 2018 budget – and every budget before that - the revenue from corporate income taxes includes the revenue from the small business tax rate. 3 That is shown as one number below:
- Therefore, in 2019-20, this number of $15.6 billion, includes roughly $526 million of small business tax revenue.
- The NDP, when calculating how much they would raise from increasing the corporate tax rate by 8.7% in that fiscal year did not remove the small business tax rate. This is clear as 8.7% of $15.6 billion is $1.357 billion – the exact number in the NDP’s fiscal plan.4
- If they would have exempted small businesses from this tax increase, their number would be approximately $45 million less.
- In every year moving forward, the NDP repeats this error and does not exempt small businesses from this tax increase.
- At a minimum this tax increase is worth $45 million per year in 2019-20 and 2020-21 and worth roughly $67 million in 2021-22 and 2022-23.
- Therefore, over the course of the NDP’s five-year plan, they have raised small business taxes by $224 million despite telling the public repeatedly that they are only taxing big business.
- The NDP is not for the little guy, they are intentionally deceiving Ontario voters and business owners, making it tougher for mom and pop families to make ends meet.
- This is on top of their immediate 25% increase in hydro rates, their support for a carbon tax that adds 35 cents a litre to gasoline prices, their increase in the business education tax costing businesses $2.4 billion over five years, and their limiting of the employer health tax exemption only to small businesses – costing businesses over $1 billion over their 5 year plan.
- In total, the NDP is increasing taxes on businesses by more than $10 billion over the course of their five year fiscal plan.
What We Will Do:
- Doug Ford and the Ontario PCs understand that small businesses are job creators and the backbone of the economy. The province shouldn’t increase taxes on small businesses and continually add to their burden. Rather, the government should do more to help small businesses thrive and prosper.
- Accordingly, the Ontario PCs will help small businesses by reducing the small business tax rate by 8.7%. This is the same percentage by which the Ontario PCs will reduce the corporate tax rate.
- This means, under an Ontario PC Government, the small business tax rate will be reduced to 3.2% from the current 3.5%.
- This tax cut will apply to the first $500,000 of profits and will cost the government just over $60 million annually once implemented. We will include this measure in our first budget.
- Over the time that the NDP will increase small business taxes by a hidden $224 million, we will cut small business taxes by $240 million. This is a difference of $464 million.
- To ensure our businesses prosper, a Doug Ford Ontario PC Government will also cut corporate income taxes from 11.5% to 10.5% to stay competitive with our neighbours and enable businesses to create good paying jobs.
- Businesses in Ontario need relief. Help is on the way.