Ontario businesses will benefit from HST, corporate tax reform: economist

Major provincial tax reforms such as the new harmonized sales tax (HST) and the proposed corporate income tax cuts will have a “profound impact” on Ontario’s business competitiveness, according to a report by economist and tax expert Jack Mintz.

Mintz, the Palmer Chair of public policy at the University of Calgary, states that in a decade, Ontario will benefit from increased capital investment of $47 billion. Up to 591,000 net new jobs will also be created, he says.

While the various tax changes will find construction still the highest taxed industry at 20.9 per cent by 2018, it will be mostly on par with others such as manufacturing at 18.2 per cent, and transportation at 16.3 per cent

“Ontario will enjoy a higher rate of productivity growth since the tax system will no longer favour some forms of business activities over others,” says Mintz in his report.

Ontario Minister of Revenue John Wilkinson was in Sudbury Nov. 4 to hold a press conference to Ontario Road Builders’ Association about the benefits of HST.

Wilkinson says the plan is an effort to encourage Ontario’s economic growth during the global recession and give the province’s economy a leg up compared to other markets. Part of the minister’s plans is to lower income tax rates after introducing HST.

The Canadian Federation of Independent Businesses says harmonization will save business $100 million a year in reduced red tape.

HST is part of the McGuinty government’s plan to radically change the Ontario tax system by marrying the GST with the PST to create a federally administered harmonized sales tax at 13 per cent. British Columbia has also expressed interest in adopting a system of HST.