Ontario will reduce the tax for SMES together with the increase in the minimum wage

Photo: Christopher Katsarov The canadian Press
The Finance minister of Ontario, Charles Sousa

Having in mind the upcoming elections, spring in the province, the Ontario liberal government will reduce the small business tax within the framework of new investments of 500 million aimed at easing the transition to the increase in the minimum wage.

 

The minister of Finance, Charles Sousa, announced the government’s plan in the fall economic statement on Tuesday afternoon. The tax rate for small businesses will increase from 4.5 to 3.5 % from 1 January 2018, and also, on the first day of the year, the provincial government will increase the minimum wage 11.60 $ to 14 $.

 

Critics of the comprehensive reform of the work presented in may calling for tax cuts for months to allow businesses to absorb the costs. The government’s plan will lead to a minimum wage of $ 15 per hour on January 1, 2019. Mr. Sousa said that the government will not stop its commitments and that an increase in the minimum wage could ” not wait “.

 

In the framework of its plan for a small business to $ 500 million, the minister indicated that the province will determine one-third of its expenditures in procurement of goods and services to upcoming small and medium-sized businesses by 2020.

 

The government will spend $ 124 million over three years to help companies with fewer than 100 employees to hire young people aged 15 to 29 years. The government will pay financial incentives of $ 1,000 for each worker hired and still $ 1000 for each worker retained for at least six months by a small company. “We also want to help young people to find meaningful employment. To find their first job or achieve the first steps to build their career. And we want to support small businesses who hire these young people “, argued the minister.

 

Mr. Sousa has also argued that the budget 2018 would be balanced — the same as for the two subsequent years.

 

Minimum wage

 

The Office of the director of the financial accountability of the Ontario (RCW), a body of analysis of the fiscal situation, had estimated that over 50,000 people would lose their jobs as a result of the increase in the minimum wage and its impact on the wage costs of enterprises in the absence of softener for SMES. In its report, published in September, BRF held that ” the government’s proposal to raise the general minimum wage in Ontario to $ 15 per hour will significantly increase the number of workers at the minimum wage, which will rise to a little over 500,000 to 1.6 million workers by 2019 “. He added that, at $ 15 per hour, adults and full-time workers will represent the majority of minimum-wage workers, whereas currently, at $ 11.40 per, this majority is composed of teenagers, young adults and part-time workers.

 

“The projected increase in the minimum wage in Ontario is more important and faster than the previous increases, this may encourage companies to reduce their costs even more radical,” he wrote.

 

Last July, the Ontario government tabled a draft law aimed in particular to increase the minimum wage of $ 11.40 per currently $ 14 in January 2018, and then to $ 15 in January 2019. Alberta had set the tone in September 2016 by adopting the plan, which will lead progressively to a minimum wage of $ 15 per hour in October 2018. She became the first province to take this path.

 

In Quebec, the general rate of the minimum wage is increased to the $ 11.25 in may. Last January, the Labour minister, Dominique Vien, was moving the target range $ 12.45 to 2020. Quebec set then a schedule of increases over several years and a target equal to 50 % of the average wage. After the increase of 50 ¢ this year, the government expects increases of 50 ¢ in 2018, 35 ¢ in 2019, and 35 ¢ in 2020. The minister was binding while the target of $ 15 at the progression of the average wage.

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