Canadian Manufacturing

Ontario stays the course

by Erika Beauchesne   

Manufacturing auto manufacturing CAW CFIB HST Ontario auto sector Ontario economy Ontario GDP tax cuts U.S. economy

Slim spending for manufacturing in Ontario 2011 budget

TORONTO—There were few new perks for businesses in Ontario’s 2011 budget, unveiled yesterday by the province’s Finance Minister Dwight Duncan.

Duncan said the government would focus on reducing its deficit to $16.3 billion this coming year, with plans to be out of the red by 2017-2018.

That’s based on the province’s expectation that GDP will expand 2.4 per cent this year and 2.7 per cent in 2012.

While the budget contained no new initiatives targeted to manufacturing, TD Economist Sonya Gulati says that sector of the economy will likely benefit from the government’s “stay-the-course plan.”


“Past policy announcements such as the HST, scheduled cuts to the corporate income tax rate, recent elimination of corporate capital taxes, and loans distributed to major auto manufacturers should help improve the corporate climate,” Gulati said.

She added those policy measures, combined with the U.S. recovery, is improving the outlook for manufacturing and exports.

CAW President Ken Lewenza agreed that yesterday’s budget will help Ontario’s auto sector along its uphill climb.

“Our research shows the HST is going to have long-term benefits for manufacturers here,” he said, adding the province’s emergency funding of the auto industry is also now paying back.

“We’re still not 100 per cent on the tax cut question, but generally we’re satisfied with this budget,” Lewenza said.

Other representatives from the business community were less than fulfilled.

The Canadian Federation of Independent Businesses criticized the province for not reducing last year’s hikes to workplace safety premiums.

“The budget still makes clear that the government wants to increase mandatory Canada Pension Plan (CPP) contributions on employers and employees,” the CFIB said in a statement.

It called for more fiscal restraint, pointing to its recent report that found Ontario should freeze, not just reduce, spending in order balance its books by 2017-2018.


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