Income

Ontario’s ‘mini-budget’ offers supports for small businesses, seniors and low-income workers

In anticipation of a possible economic downturn, government Doug Ford’s mini-budget offers support for small businesses, seniors and low-income workers, but nothing new for education, health care or to help Ontarians with the cost of living.

Monday’s 2022 Fall Economic Statement (also known as the mini-budget) tabled in the Legislative Assembly by Finance Minister Peter Bethlenfalvy included government proposals to help Ontario manage risk in an environment of high inflation and emerging economic challenges.

“As we navigate these uncertain economic times, our government is enhancing its plan with new targeted measures that support families, seniors and small businesses,” Bethlenfalvy said.

The Ontario government expects economic growth and job creation to slow significantly over the next two years to 2024 and has made short-term uncertainty its primary focus.

The budget plan calls for improving deficits — nearly balanced by 2025 — and includes a number of new tax measures targeting small businesses and seniors, as well as changes to the Ontario Disability Support Program (ODSP).

It also features significant downward revisions to real GDP growth from the 2022 budget passed in August.

The government now projects real GDP growth of 0.5% in 2023, 1.6% in 2024 and 2.1% in 2025. This is down from previous projections of 3.1%, 2% and 1.9%, respectively, in the budget. .

The government projects a deficit of $12.9 billion for 2022-23, about $7.9 billion less than projected in the budget. This reduction is mainly due to higher than expected tax revenues and GDP growth this year. The deficit should then decrease to $8.1 billion in 2023-2024 and to $700 million the following year.

A similar trend is expected for employment growth. While the province added about 324,000 jobs this fiscal year, that figure is expected to drop to just 38,000 next year, from 153,000 in the August budget. The Ministry of Finance projects the creation of around 100,000 net jobs in 2024 and around 117,000 in 2025.

Here are the highlights of the 2022 Fall Economic Statement:

  • Providing $185 million in income tax relief for small businesses over the next three years, benefiting approximately 5,500 small businesses through the proposed extension of the phase-out of the income tax rate small enterprises.
  • Automatic small business property tax reductions in all municipalities that adopt the small business property subclass.
  • Increase in the monthly earnings exemption for a person receiving the Ontario Disability Support Program (ODSP) from $200 to $1,000 per month. The province says this would allow the approximately 25,000 people currently in the labor market to keep more of their income and could encourage up to 25,000 more to participate in the labor market.
  • Planning to adjust the maximum monthly amount of the Severely Disabled Children’s Assistance Program for inflation annually, beginning in July 2023.
  • Help manage rising costs for low-income people with disabilities by planning to adjust basic ODSP benefits annually to inflation, starting in July 2023.
  • Double the Guaranteed Annual Income System payment for all recipients for 12 months starting in January 2023, a maximum increase of nearly $1,000 per person in 2023. This is expected to help approximately 200,000 low-income seniors in Ontario.
  • Propose to extend the Gasoline Tax and Motive Fuel Tax rate reductions so that the Gasoline and Motive Fuel (diesel) tax rate remains at 9 cents per liter until December 31, 2023 .

The Province also plans to invest an additional $40 million in 2022-23 in the Skills Development Fund for In-Demand Industries, as well as an additional $4.8 million over two years, starting in 2023-24, to expand the dual credit program, encourage more high school students to pursue careers in the skilled trades or early childhood education.

“We are in a time of high inflation which is straining household budgets by driving up the prices of everyday goods and services,” Bethlenfalvy said. “But I have confidence in the resilience of Ontario’s economy, its workers and its people. And I remain confident in our government’s plan to maintain our fiscal flexibility, so we can provide targeted support to individuals and businesses today, while building for the future.