Ontario's parties offer different visions on corporate tax rate

Ontario's main political parties are staking out sharply different ground on just how much tax big businesses should pay.

Doug Ford's Progressive Conservatives are promising to lower thecorporatetaxrateif they win the provincial election on June 7. The New Democrats, led by AndreaHorwath, want to raise corporate taxes, while KathleenWynne'sLiberals are proposingno change.

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The divisions mean the corporate tax rate could become a central election issue. Polling suggests manyOntariansfeel they are personally struggling to get by, even though the provincial economy is thriving and business profits keep hitting recordhighs.

Ontario'scurrent corporate tax rate is 11.5 per cent, which is lower than every other province.Ford proposes cutting that to 10.5 per cent.

"Ontario is not competitive any longer," Ford said Thursday at a news conference in Toronto. "We're driving companies out of this province."

"You see these small companiesstruggling, laying people off," he said. "They need a little relief and that's how you attract businesses."

However, Ford's proposed tax cut would not actually help small companies.Small businesses in Ontario (with less than $10 million in capital) pay tax at the much lower rate of3.5 per cent on their first $500,000 in annual profits. That rate was 4.5 per cent until the Liberal government reduced it last fall. None of the parties has promised to cutit any further.

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Ontario's corporate tax revenue was $15.8 billion this past year, and is forecast to be $15.1 billion in 2018-19, so the proposed cut by the PCs could cost the treasury roughly $1.3 billion annually.

Ford's proposal would give "a $1.3 billion payout to some of the biggest businesses in this province,"said Economic Development Minister Steven DelDuca.

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"We see now clearly whoseside he'son," Del Duca told reporters Thursday. "Toput more money into the pockets of big business, and to deny those who are working hard to get through theirdaily lives, I think that clearly illustrates what Doug Ford's values are."

Ford would halt the planned hike in the minimum wage to $15 an hour next year. Instead, he is promising to rebate all provincial income tax paid by minimum wage earners, a move that would give a full-time worker about $700 less take-home pay than the wagehike.

Among the three main parties, the only one thatwould raise corporate taxes is the NDP. The New Democrats propose boosting the rate to 13 per cent.

"For too long, Liberal and Conservative premiers have squandered billions in corporate tax giveaways," Horwathsaid in a speech this week at the unveilingof her campaign platform. "We will make sure that the most profitable corporations and the wealthiest people start paying their fair share."

The NDPprojects the tax hike would bring in $2.1 billion in annual additional revenue by 2021.

After Ford made his promise to cut corporate taxes, Horwathissued a statement saying it"showed Ontarians exactly where his priorities layand it's not with everyday families and working people."

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Ford's promise prompted questions at his Thursday news conference about how his company, Deco Labels, would benefit from the tax cut if hebecomes premier.

"Very little," Ford said. "I don't benefit a penny. Matter of fact, if anything, I'm losing money doing this job, but it's worth it."

The Green Party of Ontario wants to raise corporate taxes by between one and 1.5 percentage points, leader Mike Schreinertold CBCNews in a statement. The party would also give small businesses a break by raising the exemptionon the employer health tax to $1 million of annual payroll, from its current level of $450,000.

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