Ontario to allow municipalities reduce property taxes for small businesses

The Ontario government is proposing to give municipalities the flexibility to target property tax relief to small businesses.

Premier Doug Ford made the announcement at a press conference on Tuesday and said his government would consider matching the reductions.

Together, they would provide small businesses with as much as $385 million in municipal and provincial property tax relief.

This initiative is part of the 2020 Budget, Ontario’s Action Plan: Protect, Support, Recover. Ford was joined by Rod Phillips, the Minister of Finance, Prabmeet Sarkaria, the Associate Minister of Small Business and Red Tape Reduction, and Stan Cho, the Parliamentary Assistant to the Minister of Finance, as he made the announcement.

“Small businesses are the backbone of Ontario’s economy, but many have been suffering through the pandemic and struggling to stay on their feet,” said Premier Ford. “Our municipal partners came to us with an idea to provide more support for small businesses through property tax relief, and in our fall budget, we delivered.”

“Our government is also helping small business owners by eliminating unfair taxes on jobs and lowering the Business Education Tax.”

In the 2020 Budget, the government announced that it will lower high Business Education Tax (BET) rates for over 200,000 employers, or 94% of all business properties in Ontario, starting on January 1, 2021.

They say this will create $450 million in immediate annual savings.

In Ontario, there is a wide range of BET rates across the province, which the government says creates an unfair challenge for businesses operating in communities where rates are higher.

Rates will be reduced to 0.88%, the government said.

“Time and time again, we have heard that unfair property tax rates in some parts of the province are creating barriers to job creation and growth,” said Phillips. “We heard loud and clear that levelling the playing field and addressing unfair property tax rates is one of the most important things we can do to support small businesses in our communities.”

The government is also acting to reduce taxes on jobs, they said.

In March, the government more than doubled the Employer Health Tax exemption to $1 million for 2020. They say that employers across Ontario have indicated that this measure helped them keep workers on the job during the pandemic.

Ontario’s 2020 Budget proposes to make this exemption increase permanent, meaning an additional 30,000 employers would no longer pay this tax, they say.

The Ontario government is also offering a grant of up to $1,000 for the costs of personal protective equipment (PPE) to keep businesses safe. Applications for the $60-million Main Street Relief Grant will be available online on November 16, 2020.

Small businesses with two to nine employees in the retail, accommodations and food services, repair and maintenance, personal, and laundry services sectors can apply for this one-time grant, the government said.

“Throughout the pandemic, small businesses have been dealing with financial hardships that have made it difficult for them to stay afloat and get ahead,” said Toronto Mayor John Tory. “These tax cuts will not only provide relief for these businesses in the short and long term but ensure that once the pandemic is over, our small businesses can survive.”