Navigating times of uncertainty and planning for growth
On November 5th, 2020, Ontario’s Finance Minister Rod Phillips introduced the 2020 Ontario budget titled “Ontario’s Action Plan: Protect. Support. Recover.” As the name implies, this budget emerges in the midst of a turbulent era for the Ontario provincial government, and fiscal policy for the year ahead will detail measures taken to respond to the Covid-19 global pandemic.
The budget includes record spending and the province’s largest deficit to date. Considering how the government has had to adapt, adjust, and bolster individuals and industry in the face of COVID-19, this is not a surprise to the GrantMatch team. With this in mind, we have consolidated some of the key programs and announcements from the 2020 Ontario Budget in this document to offer our readers and clients a helpful point of reference as they look ahead to 2021. It is clear that the Ontario government is motivated to invest in key business sectors which stimulate and grow our economy. Our message as Government Funding Specialists continues to be that businesses and municipalities must think proactively about the emerging programming and grant funding as the pandemic unfolds. We are here to help organizations navigate these times of uncertainty, and plan for growth.
Business IncentivesSome of the more generalized business incentives discussed in the budget include:
- The lowering of Business Education Tax (BET) rates to 9.88% for 94% of Canadian businesses
- Increasing the Employer Health Tax (EHT) Exemption to $1 million, exempting approximately 90% of Ontario’s private-sector employers
- A Personal Protective Equipment (PPE) Grant of up to $1,000 for businesses with 2-9 employees in specific sectors
- Investing $241 million to deliver over $900 million in urgent relief to roughly 64,000 small businesses and their landlords, through the Canada Emergency Commercial Rent Assistance program, in partnership with the federal government
- Helping small businesses create and enhance their online presence to reach more customers through the $57 million Digital Main Street Program
The budget has promised Ontario’s Agri-Food sector a $25.5 million investment over 3 years in the form of the Agri-food Prevention and Control Innovation Program. While details have yet to be released, the program is expected to fall in line with other COVID related programs and be intended to mitigate the risks and disruptions caused by the pandemic. The program should be for innovation and investment in new technologies supporting both efficiencies and productivity leading to sustainability and growth for the sector. There is the implication that the program will also support modernization projects for workplaces to improve worker health and safety. We look forward to the release of specific details in the future.
The budget also expressed the provincial governments dedication to the sustainability of the industry and efficiency of the supply chain in the face of the pandemic, weather, and market fluctuations.
While the budget was light on detail in terms of incentives for manufacturing, it did discuss:
- The $500 million investment in the Ontario Together Fund to support the Canadian Manufacturers & Exporters Ontario Made program
- Reducing medium and larger industrial and commercial employers’ electricity price per kilowatt to an estimated 8.05 and 14.31 cents on average. The government will be funding 85% of previous alternative energy contracts as opposed to ratepayers
- Renewing their commitment to the automotive industry through the $295 million matching investment to retool Ford Canada’s Oakville Assembly Complex. The fabrication of electric vehicles is vital to securing the future of the sector in Ontario, and bolsters the mining industry in its demand for materials
- The Eastern and South-Western Ontario Development Funds will continue to accept applications for projects that support investments in businesses that lead to positive economic development outcomes in the province. Grants and partially repayable loans are available up to $5 million per project
While there were many opportunities announced of interest to municipalities, some of the most significant include:
- Broadband funding to better connect Ontario communities, such as additional investments of $680 million over the next four years which includes the additional $150 million allocated to the Improving Connectivity for Ontario (ICON) program
- Creation of the Community Building Fund to invest $100 million in supporting tourism, cultural and sport organizations through the Ontario Trillium Foundation
- Beginning in 2021, municipalities will be able to provide property tax reductions for eligible small business through the adoption of an optional new small business property subclass
- The province is investing $59.5 million to support Ontario’s first micro-credentials strategy to help with retraining and skills upgrading over the next 5 years
- Investing $510 million through the Social Services Relief Fund to help municipal service managers and Indigenous housing partners protect homeless shelter staff and residents, expand rent support programming and create longer-term housing solutions
- Over $1 Billion in federal and provincial funding under the newly established COVID-19 Resilience Stream of the Investing in Canada Infrastructure Program (ICIP), to support health and Safety through the accelerated delivery of priority municipal infrastructure projects as well as investments to retrofit schools and long-term care homes