Fiscal plan: end the squeeze on families, get our finances on track
Economic growth is projected to increase provincial revenues by over $17 billion over the next four years. But for everyday families, wages have been stagnant, services that make life better and more affordable have only been cut, and families are feeling the squeeze. Our plan delivers better health care, services and affordability for the middle class and low-income Ontarians, and protects them from costs.
Andrea Horwath and the NDP have based our fiscal plan on four principles:
- We will make investments that make life better for everyone
- We will protect middle-class families from tax hikes and fee increases
- We will ensure the wealthiest people and most profitable businesses pay their fair share for the services that make their success possible
- We will make sure our investment in services is financially sustainable, so we stop the decades-long pattern of cuts and funding freezes
Our changes for the better
Fair taxes for the wealthiest corporations, lower taxes for small business
Ontario’s businesses benefit significantly from Ontario’s highly educated workforce, modern infrastructure and health care system. And they’ll benefit even more from the investments we’re making. So it’s only fair to ask them to pay their share.
Andrea Horwath and the NDP will roll back Liberal corporate-income-tax giveaways, returning the tax rate on corporate profits to 13%, up from 11.5%. This is still lower than when the Liberals took power, and will put Ontario’s combined rate in line with the national average. And we’ll be competitive with the Great Lake states, even after the Trump tax bill.
To give businesses predictability, we will increase the tax on corporate profits by one percentage point in 2019–20 and 0.5 percentage points in 2021–22.
We will maintain the one-third reduction to small business corporate income tax rates.
Meanwhile, by bringing pharmacare costs into the provincial government and exercising the buying power of 14 million Ontarians, businesses in Ontario stand to save a minimum of $800 million and as much as $1.9 billion each year.
We’ll make sure small business exemptions in the Employer Health Tax actually go to small businesses.
There are a number of small business exemptions in the Employer Health Tax that are being used by larger businesses. It’s time to close that loophole. Starting in 2019–20, businesses with payrolls over $3 million will no longer qualify for small business exemptions. Starting in 2021–22, small business exemptions will be available only to businesses with payrolls below $1.5 million. This matches British Columbia’s Employer Health Tax exemptions, and will maintain small business exemptions for businesses with 40 or fewer employees.
A Fairer Business Education Tax
We will make housing more affordable to Ontarians with a speculation tax
Housing speculation and flipping are driving up housing prices. We will implement a new speculation tax that will not be limited to foreign buyers. It will be based on British Columbia’s Speculation Tax, and will apply in the regions where the Non-Resident Speculation Tax (NRST) applies. While the NRST applies only on sales, our anti-speculation tax will apply annually. It will be targeted toward foreign and domestic speculators who do not pay tax in Ontario.
Asking the wealthiest Ontarians to contribute more
Ontarians earning more than $220,000 will see their income tax increase by one percentage point, while people earning above $300,000 will see their marginal rate increase by two percentage points.
We will also introduce a modest luxury tax, of 3% on cars sold for over $90,000. This is based on an existing measure in British Columbia. Only about 1% of sales transactions will be affected, but those purchasing the most luxurious cars will pay a surcharge.
Listening to Ontario’s Auditor
Improving the integrity of Ontario’s tax collection system
In 2012, the Liberals received recommendations for doing a better job of recovering uncollected taxes. They haven’t acted.
Andrea Horwath and the NDP will act on those outstanding recommendations. We will pursue revenue lost to the underground economy, ensure recipients of corporate support have paid their taxes, collect on non-tax debts and do more to fight the underground economy for tobacco.
The recent Paradise Papers show tax avoidance and evasion are rampant, costing Canada billions of dollars. We will lobby the federal government to improve the Canada Revenue Agency’s ability to clamp down on those practices, and to close unfair tax loopholes that benefit the wealthiest.
Taxing tobacco based on its value instead of on its volume
Counting only the revenues we know we can rely on
There are a number of other revenue sources that we’ve kept out of our fiscal framework, because of a lack of government transparency or because there isn’t enough data to make a reliable projection.
Some of those potential revenues that we excluded from our framework include:
- Cracking down on excessive public sector executive compensation
- The potential for new measures to combat housing speculation
- Increased revenues from Hydro One, when we fully return it to public ownership
This is what we're fighting for
Together, we can change Ontario for the better. Are you in?