Corpcentre's Blog

February 18, 2010

Ontario’s Growth Spurt

Get ready, Canada! Ontario is about to set a new record.

With the country now emerging from the recession, it’s time to take stock and assess the damages. As a province dependant heavily on its manufacturing sector, Ontario’s GDP was one of the worst performing, matching those of Newfoundland and Labrador, contracting in 2009 by 3.5%. However, as many companies have a need to restock depleted inventories, Ontario is now benefiting from a business boom. Economic forecasts predict that Ontario’s GDP will grow by 2.4% in 2010, outpacing the national rate that is projected at 2.3%. This will be the first time in eight years that Ontario has excelled in terms of national growth. This growth is expected to continue into 2011 and reach 2.8%, although national levels are expected to reach 3% next year. Economists fear, though, that restocking inventory will only provide temporary relief. As the warehouses and shelves are filled, orders will taper off and return to earlier levels.

The growth in the GDP is good news for a province that is burdened by a massive deficit, the largest of all the nation’s provinces. Higher energy prices as well as competitive foreign markets are making it difficult to cope with the deficit. On the other hand, the HST, due to take begin on July 1, is expected to help ease the deficit burden. Combined with the HST, new, lower corporate taxes are expected to attract investments and new jobs to the province.

While manufacturing will experience a temporary post-recession growth spurt, Canada’s abundant natural resources will still lead the way economically. Saskatchewan is expected to remain the leader among provinces, based on the strength of its oil, potash, agriculture and uranium sectors. British Columbia and Newfoundland, both of whom suffered during the recession, are also expected to experience significant economic expansion in the coming year.

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December 15, 2009

Ontario Justifies HST

The votes are in. Ontario’s Liberal government passed legislation to create a single 13 per cent Harmonized Sales Tax (HST) beginning July 1, 2010. The final vote came after weeks of staunch opposition in the Ontario legislature. However, as NDP leader Andrea Horwath stated, the Liberal majority was able to “ram through the HST bill…with little debate as possible.”
 
The Liberals are enthusiastic about the HST. In a province still reeling from massive unemployment due to the current recession, the government estimates that the new tax will help create 600,000 new jobs over the next decade. Blending the PST and the GST will lower costs for businesses. This, in turn, will allow businesses to lower prices for consumers and hire more staff.
 
The opposition parties are adamant that the public, if asked, would strongly oppose the new HST and, thus, the Liberals did not take the tax issue to the polls. The opposition feels that the tax bill was railroaded as a way to increase tax revenues for the province. While many businesses will, indeed, benefit from the new tax, consumers will ultimately pay more from their pockets. Current PST exempt items including gasoline, home heating fuel, and cable TV will now be taxed under the new HST.
 
The new tax legislation is not without compensation. January 1, 2010 will see the implementation of tax cuts to both corporate and income taxes. Furthermore, some families will be entitled to a one-time rebate of up to $1,000 to offset the tax impact.
 
Ontario is not the only province to implement the HST. New Brunswick, Quebec, Nova Scotia, Newfoundland and Labrador have already done so. British Columbia has passed legislation to implement the HST next year as well.

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October 13, 2009

Federal Government: $20 Million to Develop Eastern Ontario

Filed under: economic recovery,incorporate in Ontario,Ontario Business — corpcentre @ 8:39 pm

The Canadian government’s Economic Action Plan was designed and legislated earlier this year to provide economic stimulus and fiscal assistance to segments of the country in need as a result of the recent global recession. One such area that has received special government attention is the rural region of eastern Ontario.
Over the next two years, $20 million of stimulus funds will be provided by the Federal government for the Eastern Ontario Development Program (EODP). EODP will be administered by a new government agency, the Southern Ontario Development Agency, currently being established. EODP is designed to contribute to the successful development of business and job opportunities by supporting community-based initiatives in rural communities. These funded opportunities will hopefully attract and retain youth in the communities, support skills development, make capital available to new and existing businesses, and support technological enhancements in these communities located far from the major urban centres of the province.
The rural area of Eastern Ontario extends east from Durham Region and Algonquin Park and is bounded by the border of Quebec. Not included in this program are the cities of Kingston and Ottawa.
In order to make these funds available to a broad range of residents, EODP eligibility is open to non-profit organizations (including municipalities), Aboriginal organizations, community development associations and organizations, local entrepreneurs, and small to medium sized businesses within the administered region.
Organizations requiring detailed information on eligibility and applications should contact a local Industry Canada officer. Officer information can be obtained from the Industry Canada web site. 
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