E-newsletter March 27, 2009
Ontario’s 2009 Budget: Confronting the Challenge
Today the McGuinty government announced our 2009 Budget. I know that all of you are acutely aware of the challenges of our economic situation and that we, in Ontario, are part of a larger global context. This is a Liberal budget. It is a budget designed to stimulate our economy, bolster our businesses, and at the same time, to protect our families and our public institutions. We are taking action to make Ontario more competitive, so that as prosperity returns, our families and businesses benefit.
We are proposing a comprehensive tax reform that will focus benefits on lower and middle income Ontarians. This is the single most important thing we can do to save jobs and position our economy for future growth. For five years, we’ve made progress in schools and health care, and while there is more to do, we are are on the right track.
I am proud of what we’ve been able to do in these challenging times to stay true to our commitments while finding creative and innovative ways to stimulate the economy. Below are some key highlights of the budget and complete information is available at http://www.fin.gov.on.ca/english/budget/ontariobudgets/2009/papers_all.html
As always, I look forward to hearing from you over the days to come.
All the best,
Kathleen WynneSix Things You Need to Know About Ontario’s 2009 Budget1. We are preserving and creating jobs today through $34 billion in infrastructure and other stimulus
- $32.5 billion in infrastructure investments over two years, supporting more than 300,000 jobs
- More than $750 million over two years for job creation and skills training, including making the Apprenticeship Training Tax Credit the most generous in Canada, and expanding summer job opportunities for youth by 57 per cent this summer, helping more than 100,000 young people
2. We are making Ontario more competitive, creating jobs tomorrow
- Investments to grow the green economy, including approximately $390 million to help implement the proposed Green Energy and Green Economy Act, 2009
- Investments to support innovation, including approximately $300 million over six years for research infrastructure, $100 million for biomedical research and approximately $100 million proposed to enhance tax support for the entertainment/creative sector
- Measures to attract investment, including cutting Ontario’s marginal effective tax rate on new capital investment in half and enhancing the Open For Business plan
3. We are introducing a comprehensive tax reform package
- Ontario would move to a single, value-added sales tax at a combined rate of 13 per cent July 1, 2010
- Children’s clothing and footwear, children’s car seats and car booster seats, diapers, books and feminine hygiene products would be exempt from the provincial portion of the tax
- New rebates would ensure newly constructed homes under $400,000 ? which account for about 75 per cent of new homes ? would not be subject to an additional tax burden; buyers of new homes valued between $400,000 and $500,000 could also claim a proportional rebate
- $10.6 billion in tax relief for people over three years, including
- 93 per cent of Ontario taxpayers would get a personal income tax cut by reducing the lowest tax bracket by 16.5 per cent; families and individuals with up to $80,000 of income would get an average tax cut of 10 per cent
- Families with an income of $160,000 or less would get three payments totalling $1,000 to help them adjust to the new single sales tax; singles with an income of $80,000 or less would get three payments totalling $300; payments would arrive in June 2010, December 2010 and June 2011
- A new permanent refundable Ontario Sales Tax Credit of up to $260 a year for each adult and child in low- and middle-income families. Cheques will be sent three times per year.
- $4.5 billion in tax relief for businesses over three years:
- The tax rate for small businesses will be cut by 18%
- General corporate income tax rates will be cut to 12% in 2010 and to 10% in 2013
- The sales tax and Corporate Income Tax measures, together with the previously announced Ontario and federal tax cuts would bring Ontario’s marginal effective tax rate in 2010 down to 18.6 per cent.
4. We are investing in children, families and seniors
- Advancing the government’s Poverty Reduction Strategy by proposing to nearly double the Ontario Child Benefit from $600 to $1,100 on July 1, 2009 — two years ahead of schedule
- Two per cent increase in Ontario Works and Ontario Disability Support Program benefits this year
- More than $1.2 billion for social housing rehabilitation and new affordable housing including energy retrofits, supports for low-income seniors and families, persons with disabilities, and victims of domestic violence.
- The Ontario Senior Homeowners’ Property Tax Grant - providing up to $250 to help low- to middle-income senior homeowners pay their 2009 property taxes. Starting in 2010, the maximum grant amount will be increased to $500. Over the next 5 years, the grant will provide about $1 Billion in property tax relief to over 600,000 seniors.
5. We are modernizing government and managing spending
- $1 billion efficiency target in 2011-12
- Keeping core program spending growth below the rate of revenue growth
- Freezing MPP salaries and reducing the size of the Ontario Public Service by five per cent over three years through attrition and other measures
- The government has laid out a plan to balance the budget by 2015-16
6. We are ensuring strong publicly funded schools are at the core of a competitive economy
- We are increasing education for the seventh year in a row, despite declining enrolment.
- Funding is increasing to $19.8 B -- an increase of almost $600M over last year, or more than 3%
- Four more years of labour peace and stability in our schools.
- More staff to reduce elementary class sizes and deliver specialized programs to in crease student achievement.
- More support for healthy and secure learning environments, with funding for student supervision, new and replacement schools, and school renovations and maintenance.
- We are protecting the gains we have made over the past seven years by working with boards to reduce operating costs through modest constraints and requiring better collaboration of services among boards.