Ontario Economic Update

On November 18, 2010, the Honourable Dwight Duncan, Ontario’s Minister of Finance, presented the government’s 2010 Economic Outlook and Fiscal Review. The update introduces a new Ontario Clean Energy Benefit, equal to 10% of the total cost of electricity, including tax, to eligible residential, farm and small business consumers, effective January 1, 2011. On the corporate side, the update calls upon the federal government to strengthen the integrity of the Canadian tax system by prohibiting transactions that result in the transfer of losses within corporate groups and across provincial borders. This comment responds to the federal government’s Budget 2010 commitment to explore whether the tax system would function better under new rules for the taxation of corporate groups; for example, a formal system of loss transfers or consolidated reporting. Ontario is of the view that any new approach to corporate group taxation must consider the impact on provincial revenues.

The government of Ontario is also committed to modernizing its pension system. For more information, read the discussion paper released on October 29, 2010, entitled “Securing Our Retirement Future”.

The Ontario government is on track for a deficit of $18.7 billion in 2010-2011, which is an improvement over the 2009-2010 deficit of $19.3 billion. The government believes it can eliminate deficits in eight years.