February 11, 2020
The Honourable Rod Phillips
Minister of Finance
Frost Building South, 7th Floor
7 Queen’s Park Cres
Toronto, ON M7A 1Y7
Re: Brockville and District Chamber of Commerce – 2020 Budget Consultations
Dear Minister Phillips,
The Brockville and District Chamber of Commerce has been the Voice of Business since 1906 and advocates on behalf of over 400 members in Brockville and area. As Brockville’s business advocate, we would like to submit our recommendation. A thriving business environment creates conditions that allow business owners to create more wealth and invest more in their local communities. These investments mean more services and programs that build strong, healthy, and prosperous communities.
We also find in some situations; East Ontario is not hear as other areas in Ontario. We appreciate the time you have taken to visit several places in Ontario throughout the Budget Consultations. We are pleased to provide the Government of Ontario with a few recommendations.
Small businesses make up 98 percent of all Ontario businesses and 30 percent of Ontario’s provincial GDP, yet they face several obstacles to growth. As a result, Ontario has a smaller proportion of large firms relative to US states with similar industrial compositions. This limits the productivity and competitiveness of our province. Larger firms take advantage of economies of scale, invest heavily in research and development, and generate proportionally greater export value and GDP.
Ontario’s scale-up challenge is partly a result of a tax system that does not incentivize small business owners to seek out opportunities for investment and growth. Restructuring some of these taxes could boost overall productivity at little or no cost to government. In particular, the current structure of the Small Business Deduction (SBD) means companies are faced with a substantial rise in their corporate tax rate when their annual income increases above $500,000.
We encourage the Province to exempt businesses’ incremental income (additional earnings over the previous year) from the Corporate Income Tax in a given year. With this exemption in place, firms that are growing can reinvest more into their businesses. Eligibility could be restricted to target higher-growth firms by setting a threshold minimum rate of income growth over the previous year.
Helping Business Stay competitive in small jurisdictions/ Eastern Ontario
Sustained investments are needed to expand, maintain, and upgrade broadband infrastructure across Ontario. Overregulation makes this more expensive and disincentivizes telecommunications providers from making those investments.
There are many examples of provincial regulatory barriers that make it more expensive than necessary for providers to install new broadband. Some of these barriers relate to providers’ ability to access passive infrastructure, such as hydro poles. Hydro One’s distribution network spans 123,000 circuit kilometers, serving 1.4 million customers in Ontario, many in rural areas of the province. This offers a unique opportunity to leverage existing infrastructure to deliver broadband services.
Access to transportation infrastructure can be similarly problematic. Since construction is one of the main cost components involved in expanding fibre networks to rural communities, one option to save on construction is to lay conduits for fibre parallel to highways and railways while they are under construction or maintenance. While this “dig once” approach has been used in some communities within Ontario, it has yet to become standard practice.
Helping attract Labor into small jurisdictions / Eastern Ontario
The ability to recruit and retain talent is critical to our members’ competitiveness. The most effective way for workers to attain job-relevant skills training is through experiential learning opportunities, which provide job seekers with hands-on education in real workplaces. Increasing the number of experiential leaning opportunities would not only provide employers with a more capable workforce able to meet timely and job-specific needs, but also give individuals the chance for greater economic mobility.
Also, other items of concern are Residential development and controlling of the deficit.
We look forward to hearing the outcomes of the province wide consultation in the 2020 Budget.
Brockville and District Chamber of Commerce