2008 Ontario Economic Outlook and Fiscal Review

ONTARIOS FIVE-POINT ECONOMIC PLAN

October 22, 2008

Since 2003, the McGuinty government has made strategic investments in skills and knowledge, infrastructure, lowering business costs, innovation and key partnerships, all of which have helped prepare Ontario and Ontarians to weather the current economic challenges.

Through its balanced, comprehensive five-point economic plan, the government is working to strengthen the economy and enhance the foundation for long-term growth. The plan is the right plan for the times. And the plan is working. The government’s investments constitute an economic stimulus package that is helping individuals, families and businesses today:

Investing in skills and knowledge

  • This fall, the government’s Second Career Strategy, which helps retrain laid-off workers for new jobs, will be enhanced
  • The strategy is part of the $2 billion Skills to Jobs Action Plan, which further enhances skills as well as builds places to learn
  • The $6.2 billion Reaching Higher Plan for postsecondary education and investments in skills training has resulted in 100,000 more Ontarians attending colleges and universities
  • As a result of Employment Ontario, which provides more than $1 billion annually to enhance skills, some 50,000 more people are learning a trade
  • With new funding in high schools, over 22,000 additional young people have graduated from high school since 2003, instead of dropping out.

Investing in infrastructure

  • The Investing in Ontario Act, 2008 (IOA) will provide $1.1 billion to Ontario municipalities this year to improve roads and bridges, expand public transit and build other municipal projects throughout the province
  • The IOA investment is expected to create 11,000 full-time jobs during the construction period and will make Ontario’s economy more competitive in the long term
  • ReNew Ontario’s five-year, $30 billion infrastructure investment is building new roads, schools, hospitals, bridges and transit across Ontario
  • Today, more than 100 major construction projects have been initiated as a result of ReNew Ontario
  • We have invested a total of $9.9 billion in infrastructure in 2007-08, creating 109,000 full-time equivalent jobs during the construction phase of the projects.

Lowering business costs

  • Tax reductions announced since 2004 have already saved businesses more than $1.5 billion
  • When fully phased in, our cuts will save businesses nearly $3 billion annually
  • The capital tax has been eliminated for manufacturers and resource-based sectors retroactive to January 1, 2007, providing businesses with $190 million in rebates
  • Capital tax rates have been cut by 21 per cent for all businesses retroactive to January 1, 2007
  • The small business deduction threshold was increased to $500,000 from $400,000 retroactive to January 1, 2007
  • Business Education Tax rates are being reduced across Ontario over seven years
  • Business Education Tax rate cuts have been accelerated for northern businesses.

Strengthening the environment for innovation

  • By the end of this year, Ontario will have committed $1 billion to support about 1,000 projects that are helping to create the jobs of the future
  • Government investments are already attracting new high technology jobs to Ontario
  • The government has also proposed an innovative 10-year refund of corporate income tax for new businesses that commercialize ideas developed at qualifying Canadian universities, colleges or research institutions.

Forming key partnerships

  • A new Minister of International Trade and Investment will work on promoting Ontario to the world and attracting new investment and trade opportunities
  • Ontario is partnering with key sectors of the economy, Aboriginal peoples, municipalities and others to foster growth
  • Ontario will continue to press the federal government for fairness.

Alicia Johnston, Minister’s Office, 416-325-3645
Scott Blodgett, Ministry of Finance, 416-325-0324

ontario.ca/finance-news
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