By James Neeley
With major tax reform, billions in infrastructure dollars, an increase in the minimum wage and the harmonizing of sales taxes, the 2009 Ontario budget is getting mixed reviews.
"From a municipality point o f view we are pleased," said North Bay Mayor Victor Fedeli, explaining the province matched federal stimulus dollars previously announced.
The Ontario budget sets aside $32.5 billion for infrastructure development including roads, hospitals, schools and social housing.
"As long as North Bay gets our fair share -- truly merit based and not mired in politics -- and (the dollars) get shipped out quickly for important projects."
Fedeli highlighted four "shovel ready" projects the city plans to apply for government funding; $7 million in upgrades for McEwen Avenue to facilitate commercial development, $3 million project on Front Street to enable the development of an 18-unit townhouse complex, $3 million for a street light green energy project, and a sports complex set to include three soccer and two baseball fields.
On the down side is the harmonized sales tax, Fedeli said. "I personally agree with a harmonized tax, but I think the timing is off."
The switch should have taken place in smoother economic times, he said. "Then the impact is not felt. (When) everyone was working, throwing it in would have been inconsequential, it would have been lost in the good days.
"But putting it in when people are out of work and there is nothing but uncertainty in the national economy -- it's the right move, wrong time," Fedeli said.
In simple terms the harmonized tax means eight percent on all homes, that's $32,000 on a $400,000 home, he explained.
"In the hay day an extra $32,000 wouldn't have mattered, but now every penny counts."
The city is thankful the harmonized sales tax will be revenue neutral for municipalities, Fedeli said.
"That's something we needed to hear because it would have been an extra $4 million in payments on our capital budget alone."
The harmonized tax was also a miss for the Canadian Federation of Independent Businesses (CFIB), said Ontario vice president Judith Andrew explaining that the lack of consultation caught the Ontario business community by surprise.
"We're starting behind the goal line. There's a lot to be done to educate businesses on how it will affect them," she said.
Overall, the budget gets a mixed review from the CFIB, Andrew said. "There are some things we give them an 'A' for and others a 'D' or an 'F.'"
The CFIB serves more than 100,000 small and medium-sized businesses in Ontario, and for their members the best news in the budget is knowing "taxes will be going down over the next two years," Andrew said.
The reductions in personal income tax, small business corporate income tax and the elimination of the small business surtax will put cash in small business coffers.
But the government is taking dollars away from business with the other hand, Andrew said.
"The increase in the minimum wage (to $10.25 by 2010) comes out of the pocket of business," she said. "We thought it was a negative thing in the current economic climate."
In this difficult economic climate, Andrew said. there is very little in the budget to "weather the storm."
Most of the budget is geared towards 2010,she said. "The government would argue infrastructure projects are stimulative, but it's very hard to get shovels in the ground right away."
