On March 25, the Ontario government released an economic forecast and fiscal update for the province in lieu of a budget. The province will be introducing a budget no later than November 15, 2020. The economic and fiscal update announced what measures the province is taking to protect individuals and businesses during the COVID-19 crisis. OFA has outlined the announcements and support measures that directly impact Ontario’s agri-food sector and rural communities.
The Ontario government announced a $17 billion aid package. The $17 billion is broken into two components. The first is $7 billion in direct support for healthcare, employees and employers. The second component of the aid package consists of $10 billion in tax relief to improve cash flow during the COVID-19 crisis.
Measures that benefit farmers and rural communities
The Ontario government has announced the following support measures for farmers, small businesses and municipalities.
- Deferring $6 billion in provincial taxes until August 31.
- Deferring $1.9 billion in Workplace Safety & Insurance Board (WSIB) premiums for 6 months.
- Postponement of MPAC’s 2021 property tax reassessment.
- Deferring $1.8 billion in education property taxes for 90 days with the expectation that municipalities provide residents, farms and other businesses with $1.8 billion in property tax deferrals over the same time period.
- Providing an additional $1.5 billion in electricity cost relief for eligible farms, residents and small businesses.
- Setting time-of-use prices for electricity at the lowest rate for 45 days.
- Increasing the exemption for Employer Health Tax from $490,000 to $1 million. This will save employers $355 million in 2020.
- Proposing a new 10% refundable corporate tax credit to support business investment in regions where employment growth has lagged.
- $350,000 in additional funding will be made available for washing & sanitizing measures to ensure the Ontario food terminal remains open.
- $150,000 in additional funding for meat and dairy inspection services.
Economic and fiscal projections for Ontario
- The Ontario government is projecting 0% real GDP growth for the province in 2020. That growth is expected to rebound to 2% in 2021.
- The 2019-2020 budget deficit is projected to be $9.2 billion.
- The 2020-2021 budget deficit is projected to rise to $20.5 billion as a result of the impact of COVID-19 on tax revenues and the increased government expenditures outlined above.
Additional measures announced
- An additional $3.3 billion in healthcare funding.
- Doubling of the Guaranteed Annual Income System (GAINS) payment to low income seniors for 6 months
- Providing parents with a one-time payment for additional costs while kids are home from school.
- $100 million in new funding for skills training for workers impacted by COVID-19.
- Suspension of Ontario Student Assistant Program (OSAP) payments for 6 months.
OFA will continue to work with all levels of government to ensure farmers and our rural communities remain strong during the COVID-19 crisis.