Niagara’s Largest Business Group Reacts to Ontario Budget with a Mixture of Enthusiasm, Caution and Reserved Judgement

A News Release from the Greater Niagara Chamber of Commerce

Posted April 12th, 2019 on Niagara At Large

Niagara, Ontario – The new Government of Ontario released its first budget yesterday afternoon.

Although a budget is a closely-guarded secret until its release, some measures were expected: tax cuts aimed at stimulating business growth, dental care for seniors in poverty, childcare subsidies, a transit plan for the GTA, some service cuts and/or efficiencies, a virtually-unavoidable deficit, and an omnibus of legislation, some unrelated to the budget, in a move which has become routine for Canadian governments of all parties.

As in 2018<https://gncc.ca/gncc-welcomes-business-investment-and-municipal-supports-but-urges-deficit-caution-in-ontario-budget/> and 2017<https://gncc.ca/gncc-offers-comments-2017-ontario-budget/>, the GNCC urged caution on deficit spending.

Ontario Finance Minister Vic Fedeli presents the 2019 budget as Premier Doug Ford looks on

Recognizing that building the provincial public debt to its current and alarming level took decades, and was participated in by all three major parties at one point or another (as documented in our two-part<https://gncc.ca/ontario-red-part-one/> series<https://gncc.ca/ontario-red-part-two/> on the provincial debt, and recently examined<https://gncc.ca/accounting-for-ontarios-debt/> by the Ontario Chamber of Commerce), we must accept that paying it down responsibly, without swingeing cuts, would also take decades.

That being said, the Province must get back on track towards balance, then surplus, and pay down this debt.

The Government of Ontario, despite running a deficit this year, has promised such a course, and Minister Fideli spoke at length about the imperative of balancing the budget. However, this budget is larger than the preceding one by nearly $5-billion.

Most of the return to balance will come closer to the next election, if the government is able to keep to its schedule, but a return to balance is not something that can be put off indefinitely.

Ford government moving to liberalize Ontario’s laws for selling wine and beer

The GNCC is enthusiastic about investments in infrastructure, particularly in broadband, and about long-overdue reforms to skills and training. This, along with recent decisions to abolish the Ontario College of Trades and to revise apprenticeship ratios, has been requested by the business community for many years.

A new Ontario childcare tax credit has been announced and provides up to 300,000 families with as much as 75% of their childcare expenses. The availability of childcare has been a problem for employers, as it keeps many who cannot afford it out of the workforce, particularly the women on whom the burden of child-rearing tends to fall.

Further, combining childcare with schools may enable a lot of schools slated for closure, particularly in rural areas, to remain open.

Promises to sell more beer and wine in corner stores may help Niagara’s breweries and wineries. We also applaud the Premier’s taking a leadership role in liberalizing inter-provincial alcohol trade.

Now that the Government of Canada has opened the doors, it is important that the provinces make the most of this opportunity.

However, the GNCC cautions that Niagara’s wine industry is smaller than its foreign competition, and overly rapid privatization of alcoholic beverage sales without sufficient measures to protect VQA wines and Niagara’s industry may result in that industry being devastated by a flood of cheap, foreign imports.

With the VQA support programs being axed, that industry is now at considerable risk and is competing against foreign wines enjoying large subsidies which Ontario wines no longer command. As the GNCC urged on the buck-a-beer<https://gncc.ca/gncc-asks-niagara-to-support-local-breweries-and-avoid-buck-a-beer/> measures, we hope that measures taken in this industry will not only benefit Ontario consumers, but Ontario businesses and employees as well.

Holy Cross Secondary School students in St. Catharines protest anticipated cuts to education funding last week

Funding cuts to the post-secondary sector and restrictions on the funding they will still receive may have deleterious effects on the quality and quantity of graduates that Ontario produces.

Regular surveys of Ontario businesses have revealed access to talent as the largest problem challenging their growth and prosperity; to resolve this problem, we had hoped that the Government of Ontario would invest more in training and education to create a new generation of skilled workers and entrepreneurs for the future growth of the province.

Tying post-secondary funding to key performance indicators may increase the quality of education, but it may not, and we reserve judgement on that question until the actual policy has been announced.

The budget has no new taxes, and instead of promised corporate tax rate cuts from 11.5% to 10.5%, faster write-offs on capital investments expected to provide $3.8 billion in corporate tax relief over six years.

The GNCC recognizes that taxes are necessary and must be set at a level appropriate to deliver the public services that citizens and businesses depend upon, but tax increases should be a measure of last resort for any government.

The Government of Ontario has adopted a responsible philosophy of seeking all possible efficiencies that will reduce spending without reducing services before it considers increasing revenue.

The Greater Niagara Chamber of Commerce is the largest business organization in Niagara and the third-largest Chamber of Commerce in Ontario, with 1,600 members representing 50,000 employees. More information on the GNCC is available at gncc.ca<https://gncc.ca/>.

To listen to the whole presentation of Ontario’s 2019 budget this April 11th, click on the screen below –

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“A politician thinks of the next election. A leader thinks of the next generation.” – Bernie Sanders

 

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