Corpcentre's Blog

October 5, 2009

100 Million Dollar Development Program For Southern Ontario

Prime Minister Stephen Harper’s Economic Action Plan, officially released in January of this year, is the result of consultations and discussions with interest groups, business leaders, provincial and municipal governments and the Canadian public. The global recession has affected each province differently and, similarly, different communities have specific needs. As a result of the specific economic challenges faced by communities and businesses in Southern Ontario, a new federal agency was created to address those issues.

On August 13, Mr. Harper launched the new Federal Economic Development Agency for Southern Ontario (FedDev Ontario). As economic recovery begins in Canada and in nations around the world, FedDev Ontario will help workers, businesses and communities in Southern Ontario take advantage of various economic opportunities.

The new agency will use several new or existing programs to expedite the flow of funds to Southern Ontario. For example, $100 million will be available via the Southern Ontario Development Program to promote economic development and job creation. An additional $350 million from the Community Adjustment Fund (CAF) will provide short term economic stimulus to communities affected directly by the recession. The CAF will also provide $30 million to the Community Future Development Corporation which provides important services to businesses and entrepreneurs in Southern Ontario. The Business Development Bank of Canada will invest $50 million in Southern Ontario. And, finally, more than $67 million in grants will be available from the National Research Council (NRC) for technical innovation leading to wealth creation. And, the Industrial Research Assistance Program of the NRC will receive an additional $27.5 million to foster innovation among small and medium-sized businesses in Southern Ontario.

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August 11, 2009

Harmony in Ontario Tax System?

Filed under: incorporate in Ontario,Ontario Busines,Ontario Companies — corpcentre @ 5:53 pm

The HST – Harmonized Sales Tax – will become a way of life in Ontario. The new 13 percent tax, slated to begin July 2010, will harmonize the federal and provincial sales taxes. Provincial legislators claim that the HST is good for the province. It will ultimately save businesses money and these savings can be passed on to the consumer. Not everyone, though, is as optimistic as the province’s leaders.

Some analysts and tax specialists predict that the HST will create an underground economy. It will negatively affect many small and medium-sized firms that provide services and were previously exempt from the provincial sales tax. This will force these businesses offshore or to other provincial jurisdictions that don’t charge PST on services. Ontario will lose the competitive advantage that it had.

Not all analysts agree with this doomsday outlook, though. Citing the Atlantic Provinces that harmonized their sales taxes in 1997, no great revolution took place. There was no tremendous increase in business outsourcing their work, nor did businesses leave home to seek better tax systems across the nation.

Ontario legislators predict that, due to the HST, companies will save $500-million in tax compliance. The new tax will also improve cost efficiencies in government. The province does acknowledge that business will have to change their accounting and point-of-sale systems to accommodate the new tax. However, the province has set up a one-time $400-million fund that will provide tax credits to small businesses to offset the costs of these changes.

One final skeptical note that opponents point out. Previously, companies were compensated for collecting retail sales taxes. Under the new HST, businesses will provide the collection services for the province free of charge.

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July 16, 2009

Canada More Confident About Hiring as Ontario Catches Up

According to the Bank of Canada’s Business Outlook report, Ontario businesses are not as optimistic regarding hiring as companies in other Canadian provinces.

The Bank of Canada released this and another report on July 13 2009. Both are bullish about the Canadian economy yet bearish on Ontario’s payroll statistics. The central bank said “On balance, firms expect to increase the level of employment over the next 12 months… Hiring intentions have improved in all sectors but continue to be relatively weak in some regions, notably, in Ontario.”

Out of 100 companies interviewed between May and June of 2009, only 39% expected to increase payrolls during the next year and 17% expected declines. The last report in April said that 25% were optimistic and 26% were expecting payroll cuts.

The central bank did not explain why Ontario was not as confident regarding hiring. Michael Gregory of BMO Capital Markets, a private-sector economist, pointed to the manufacturing sector saying that the survey was conducted during the shutdown of Chrysler LLC‘s business operations and prior to the emergence of the new General Motors Company.

Meanwhile, the Conference Board of Canada issued its own report forecasting moderate growth for the Canadian economy which would cause the GDP to diminish by 1.9% in 2009 yet is expected to bounce back in 2010 by 2.7%.

Despite these hiring trends, 61% of Canadian businesses are more positive about future sales despite the credit crisis. Only 33% of respondents suggested that credit conditions have tightened within the last few months.

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