Starting this week, the province is paying 800,000 Ontario businesses transition payments of $300 up to $1000 as they adapt to the Harmonized Sales Tax (HST).
The government estimates the changes to the tax system will help create almost 600,000 net new jobs within the next 10 years.
Revenue Minister Sophia Aggelonitis said, “The Small Business Transition Support will help businesses adapt their point of sale and accounting systems for the HST. However, the most important benefit for businesses and Ontario families will be the stronger economy and the jobs that the HST will help create.”
In total, Ontario will provide an estimated $400-million in one-time transition payments to Ontario businesses under the Small Business Transition Support Program
Fewer small- and medium-sized businesses are paying the Corporate Minimum Tax (CMT), and the CMT rate is cut from 4 to 2.7 per cent
The small business corporate income tax rate is cut from 5.5 to 4.5 per cent. The small business deduction surtax is eliminated
Together, the tax cuts and HST reduce the tax burden on new small business investment by more than half, from almost 29 per cent to just over 13 per cent. A study by the TD Bank touted by the government estimated that about 80 per cent of cost savings to business will be passed on to consumers in the first year the HST comes into effect, rising to 95 per cent by the third year.
