Election 2011 and Your Business: What a minority government means
By Adam
October 12, 2011
Uncategorized
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By Sean Driscoll
I’m not a political commentator. However, with the recent heated election taking place here in Ontario, it was hard to resist.
With the Ontario provincial election now over, it looks like we have a minority government in Queen’s Park (just barely, with 53 seats for the Grits). While still in power, October 6th ends eight years of a majority Liberal government enjoyed by Premier Dalton McGuinty. Though some would have been happy to see a party other than the Liberals in power, a minority government can lead to deadlock (so the pessimist would argue) but could also lead to some pragmatism (the optimist would argue). Either way, we should see a lot of compromise over the next four years.
Impact on your books
Not one of the leaders of the parties would argue against job creation and helping business, especially in this still turbulent economic climate. But they do differ on how taxes should be handled, which will affect small businesses. So, the question for small business owners is: How does this election impact me? In all fairness, there will likely be little to no impact on small business operations. All the leaders promised to lower the basic corporate tax rate to 10%, while failing to add that it was already set to be lowered to 10% effective July 1, 2013. So regardless of the winner, the corporate tax rate stays the same.
Small Business Tax Rate
As it stands, small business owners in Ontario can claim the Ontario small business deduction if their taxable income is under a set amount (set at $1.5-million a year) to further reduce how much they pay in taxes. The current rate is set at 4.5%. The Liberals and the NDP both stated in their platform that they would reduce this rate to 4.0% to create a more competitive market. Interestingly enough, the Progressive Conservatives declined to state any plans to lower the rate. While not declaring they would lower taxes, the Tories stated in their platform that they would introduce a bill of rights for small business owners. It would include the following:
But with more Red and Orange seats than Blue seats, it’s safe to say that we will not see the above introduced any time soon, and will likely see a small business deduction rate lowered to 4.0%.
Sean Driscoll is an internal communications specialist with Staples Canada. A graduate of Carleton University in his native Ottawa with a B.A. in Political Science and History, Sean moved to Toronto to pursue a career in communications and holds a diploma from Seneca College in Corporate Communications. Having spent a year abroad in Dublin, Ireland, Sean acquired the gift of the gab and an appetite for travel.
I’m not a political commentator. However, with the recent heated election taking place here in Ontario, it was hard to resist.
With the Ontario provincial election now over, it looks like we have a minority government in Queen’s Park (just barely, with 53 seats for the Grits). While still in power, October 6th ends eight years of a majority Liberal government enjoyed by Premier Dalton McGuinty. Though some would have been happy to see a party other than the Liberals in power, a minority government can lead to deadlock (so the pessimist would argue) but could also lead to some pragmatism (the optimist would argue). Either way, we should see a lot of compromise over the next four years.
Impact on your books
Not one of the leaders of the parties would argue against job creation and helping business, especially in this still turbulent economic climate. But they do differ on how taxes should be handled, which will affect small businesses. So, the question for small business owners is: How does this election impact me? In all fairness, there will likely be little to no impact on small business operations. All the leaders promised to lower the basic corporate tax rate to 10%, while failing to add that it was already set to be lowered to 10% effective July 1, 2013. So regardless of the winner, the corporate tax rate stays the same.
Small Business Tax Rate
As it stands, small business owners in Ontario can claim the Ontario small business deduction if their taxable income is under a set amount (set at $1.5-million a year) to further reduce how much they pay in taxes. The current rate is set at 4.5%. The Liberals and the NDP both stated in their platform that they would reduce this rate to 4.0% to create a more competitive market. Interestingly enough, the Progressive Conservatives declined to state any plans to lower the rate. While not declaring they would lower taxes, the Tories stated in their platform that they would introduce a bill of rights for small business owners. It would include the following:
- · Red-tape reduction for fast, efficient, customer-friendly service standards when dealing with government agencies
- · Choice over mandatory smart meter energy pricing
- · Greater ability to bid on government contracts
- · A formal, impossible-to-ignore voice for small business owners in debating any new legislation or regulation that could affect the economy
But with more Red and Orange seats than Blue seats, it’s safe to say that we will not see the above introduced any time soon, and will likely see a small business deduction rate lowered to 4.0%.
Sean Driscoll is an internal communications specialist with Staples Canada. A graduate of Carleton University in his native Ottawa with a B.A. in Political Science and History, Sean moved to Toronto to pursue a career in communications and holds a diploma from Seneca College in Corporate Communications. Having spent a year abroad in Dublin, Ireland, Sean acquired the gift of the gab and an appetite for travel.