Ontario Government Enhances Ontario's Tax Competitiveness

"Although economy has proven to be resilient, the McGuinty government recognized the need for immediate tax relief in some sectors. Areas, such as manufacturing, forestry, agriculture and tourism, face serious challenges," said Finance Minister Dwight Duncan. "To support these sectors and all of Ontario's businesses, we've proposed a number of tax breaks - some are retroactive to January 2007 while others will begin in the New Year." Tax breaks taking effect January 1, 2008, include: - eliminating the Capital Tax for businesses primarily engaged in manufacturing and resource activities; - increasing the Ontario Film and Television Tax Credit rate to 35 per cent from 30 per cent; and - increasing the Ontario Production Services Tax Credit rate to 25 per cent from 18 per cent. Some of the proposed tax reductions are retroactive to January 1, 2007, including: - providing a 21-per-cent Capital Tax rate cut for all businesses retroactive to January 1, 2007, on the way to full elimination in 2010; and - increasing the small business deduction threshold to $500,000 from $400,000 - retroactive to January 1, 2007. The government is also proposing to extend by one year the phase-out of the provincial tax credit for investments in Labour sponsored Investment Funds, to the end of the 2011 tax year. The maximum investment amount would increase to $7,500 from $5,000 beginning in the 2007 tax year, providing about $38 million in additional financial assistance over three years. "The people of Ontario are counting on us to move Ontario forward - and that is what we are doing," said Duncan. "Our government has recognized the needs of our business sector, and we've taken action to continue our province's economic success." http://www.newswire.ca/en/releases/archive/January2008/01/c6237.html

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