The Government of Ontario released its highly-anticipated $17B Action Plan Wednesday afternoon in response to the COVID-19 pandemic, including $10B in support for businesses and individuals.
The Plan, titled “Ontario’s Action Plan: Responding to COVID-19 (March 2020 Economic and Fiscal Update),” acts in lieu of the Government’s traditional spring budget and is Ontario’s first major step in allocating resources to redress the downward effect the virus has had on the economy. In fact, the Province has predicted it will see a deficit of $20.5B in 2020-21 due to COVID-19, compared to $9.2B in 2019-20.
In response, the Plan includes a mix of reactionary funds to support the healthcare system and workers, but notably also features historic levels of prudence, including as much as $4.8B in contingency and reserve funding. Much of the money earmarked for business takes the form of tax payment deferments.
Overall, the Plan allocates $7B in additional resources for healthcare system workers and direct support, and another $10B for businesses and individuals through tax and other deferrals in an effort to protect jobs and improve cash flow.
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NEW ONTARIO ACTION PLAN MEASURES
- $6B in Tax Relief for Businesses. The Government will provide five months of interest and penalty relief on the majority of provincial taxes applicable to businesses.
- $1.9B WSIB Deferment. This money will go to the Workplace Safety and Insurance Board (WSIB) to allow employers to defer their payments by up to six months.
- $1.8B School Tax Deferment. The upcoming June 30 deadline for municipal remittance of education property tax will be deferred by 90 days. This will enable municipalities to pass this deferral along to businesses and residents.
- $1.5B in Electricity Cost Relief. Eligible farm and small business consumers will see more affordable electricity bills thanks to a $1.5B increase in 2020-21 cost relief programs. In addition, these groups will now pay the lowest available rate for their electricity consumption for a period of 45 days.
- $355M in EHT Tax Cuts. This change would make 90% of all Ontario private-sector employers eligible to not pay the Employer Health Tax (EHT) in 2020.
- $200M for Research and Innovation. This money will go to research institutions, industry, and nonprofit scientific partners to develop tools and resources to combat COVID-19 and related diseases.
- $148M for the Nonprofit Sector. Charities and nonprofit social services organizations, including food banks, homeless shelters, churches, and emergency services, will receive this money to support their capacity to respond to the pandemic. Funding will be allocated directly through the Consolidated Municipal Service Managers and District Social Service Administration Boards.
- $100M for Skills Training. Employment Ontario will provide skills training programs for workers affected by the outbreak.
- $26M for Indigenous Communities. This additional support will provide communities with funding for healthcare professionals, critical supplies, and support for urban Indigenous people in financial need.
- New Tax Credit for Businesses in Affected Regions. Businesses in regions lagging in employment growth will benefit from the new Regional Opportunities Investment Tax Credit, a 10% refundable corporate income tax credit. This tax credit will be available to eligible businesses that construct, renovate or acquire qualifying commercial and industrial buildings in designated regions, saving them up to $45k in the year. Is your business benefiting from all possible tax credits and grant programs? Book a consultation now to find out.
- Procurement. A new website, Ontario Together, encourages manufacturers to produce essential equipment.
- Employment Protection. Employees in isolation or quarantine or that need to be away for childcare will be able to take job-protected leave. This legislation is expected to quickly pass.
- Emergency Childcare. Frontline workers can benefit from emergency childcare options.
The Ontario Government also announced Wednesday it will release a multi-year provincial Budget by Nov. 15, providing it with more flexibility to respond to the changing COVID-19 situation. Visit fundingportal.com now to sign up to receive the latest COVID-19 incentive news and to learn more about our grant finding and writing services.