Starting New Year’s day, 93 per cent of Ontario income tax payers will be getting a permanent tax cut according to Perth-Wellington MPP John Wilkinson.
He said the change is part of a tax plan that will help create 591,000 jobs by making the province more attractive for new business investment.
“Starting Jan. 1, less provincial income tax will be taken off your paycheque,” he said. “Millions of Ontarians will benefit for years to come. To find out more I invite people to visit the website www.ontario.ca/taxchange. 2010 will be a year of tax reform, the most comprehensive in over 40 years.”
He explained that the provincial government is permanently cutting the first income bracket tax rate by one percentage point, from 6.05% to 5.05%.
“As a result, Ontario will have the lowest tax rate of any province on the first $37,106 of taxable income.”
Under the reform, an additional 90,000 lower income Ontario taxpayers will no longer pay any personal provincial income tax.
Ontario’s tax reform package includes $10.6-billion in direct payments and permanent tax relief for people over the next three years. It includes a new, permanent Ontario sales tax credit, an enhanced Ontario property tax credit for seniors, cuts to corporate income tax rates, and merging two sales taxes into a harmonized sales tax. As well, most Ontarians will receive three, tax free, transition cheques starting in June. The reforms are designed to strengthen the economy.
Economists, business groups and poverty advocates agree that is the right thing to do – because it will help more people find a good job.
Reports say that over the next ten years it will result in $47-billion in additional business investment in Ontario, which will translate into an estimated 600,000 additional jobs.
“Getting our high unemployment rate down is essential so we can continue to support our most valued public services, like our schools and hospitals.” Wilkinson said.
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The government is cutting the first tax bracket rate from 6.05 per cent to 5.05 per cent – the lowest provincial tax rate in Canada, on the first $37,106 of taxable income.
Starting in August, 2.9 million low- to middle-income Ontario families and individuals will receive a new, permanent Ontario sales tax credit of up to $260 for each adult and child per year – one of the most generous in Canada.
An additional $270 million in annual property tax relief, through enhancements to the Ontario Property Tax Credit, will benefit 2.3 million low- to middle-income homeowners and renters.
$4-billion in sales tax transition benefits to 6.5 million Ontario families and individuals – totalling up to $1,000 for families (including single parents) and up to $300 for single people – in 2010 and 2011, to ease the transition to the Harmonized Sales Tax (HST), starting in June.
In addition to tax relief, the tax changes, when fully phased in, include more than $2.4-billion a year in corporate income tax cuts.
In November, economist and tax expert Jack Mintz estimated that the tax changes, together with other recent tax measures, will create 591,000 new jobs within ten years.
