2017/2018 Ontario Provincial Budget – Government Incentives Highlights
The newly released provincial budget provides insight into the allocation of government spending. How will your company benefit from the introduction of new programs and the refunding of existing programs? Proactively discussing funding strategies and eligible projects will help in securing your share of the spending.
The Business Growth Initiative will create opportunities to make Ontario’s economy more innovative, help scale up small businesses into medium-sized and large enterprises, and reduce the regulatory burden on businesses.
New Funds and Programs
- Cleantech Equity Fund: Creation of a new $55-million fund to make equity investments in cleantech firms, supporting Ontario SMEs
- Small Business Innovation Challenge: A $28.8-million pilot to help Ontario SMEs demonstrate innovative technological solutions to problems identified by the government
- College Applied Research and Development Fund: Launched January 2017, a three-year, $20-million fund to support industry-academic collaboration between Ontario businesses and colleges.
New Investments Through the Business Growth Initiative- Highlights for the 2017-2018 Fiscal Year
- $50-million to establish the Vector Institute for artificial intelligence, which will work to produce, attract and retain top talent in the field, support AI technology start-ups, and generate investment from companies looking to hire experts and expand their AI divisions
- $20-million, over five years, for Ontario to partner with Waterloo’s Quantum Valley to create the Quantum Valley Ideas Lab to help develop cutting-edge research, train highly qualified personnel, and support academics in the field of quantum science
- $75-million, over five years, in an Advanced Research Computing and Big Data Strategy
- $80-million, over five years, to create the Autonomous Vehicle (AV) Innovation Network, in partnership with Ontario Centres of Excellence
- Continued support by the Province to support the Investment Accelerator Fund (IAF), which has invested in 110 companies
New Environmental Spending – Highlights for the 2017-2018 Fiscal Year
- $800-million to support homes and businesses (GHG and electricity consumption reductions)
- $420-million to modernize transit
- $410-million to implement Green Investment Fund initiatives
- $377-million through the Green Ontario Fund for households and businesses to adopt proven low-carbon technologies (households, SMEs, large industries)
- $200-million for schools to improve energy efficiency and install renewable energy technologies
- $90-million to promote electric vehicles
- $85-million to support additional retrofit activities in social housing apartment buildings
- $55-million to strengthen the partnerships with governments
- $50-million in commuter cycling infrastructure (cycling lanes separated by a curb, cycling signals)
- $22-million electric vehicle (EV) charging infrastructure across the province
- $20-million to enhance research and development
- $5-million to preserve agriculture, lands and forests
- $15-million, over three years, for 3,000 new internships and fellowships through the Mitacs Accelerate program
- TalentEdge: Renewing support for the program delivered by Ontario Centres of Excellence to support 56 additional fellowships and 84 additional internships per year for college students, undergraduates, graduate students, recent Masters and PhD graduates, and postdoctoral fellows
- Aboriginal Economic Development Fund (AEDF): $70-million, over six years, to improve access to financing, skills training and community economic planning supports
- Aboriginal Community Capital Grants Program (ACCGP): $3-million, 2017-2018, to promotes strong Indigenous communities by funding community capital projects that provide a delivery point for community services and business activity (build/renovate community infrastructure)
- Jobs and Prosperity Fund: A 10-year, $2.7 billion fund that helps the government partner with businesses to enhance productivity, innovation and exports. Project commitments to date will support the creation and retention of more than 37,600 jobs, leveraging business investments of more than $7.4 billion.
Ontario’s Manufacturing Sector
Ontario’s dynamic and diverse manufacturing sector is sustaining jobs across the province and generating most of Ontario’s goods exports. Manufacturing directly accounts for over 660,000 jobs and generates over 12% of Ontario’s GDP. Supported by greater demand and a more competitive Canadian dollar, Ontario manufacturing sales increased over 37% between 2009 and 2016, to almost $301 billion.
- Managing electricity costs: Ontario’s Industrial Conservation Initiative, which helps large electricity users reduce their bills by providing an incentive to shift electricity consumption to off-peak hours, was expanded to include more than 1,000 newly eligible customers by reducing the threshold for eligibility and opening the program to all sectors.
- The Corporate Income Tax (CIT) rate on income from resources, manufacturing and processing (M&P) was reduced from 12% to 10% in 2010. Ontario manufacturers and processors also benefit from an accelerated depreciation rate for manufacturing and processing machinery and equipment from 2016 to the end of 2025.
Ontario’s Automotive Sector
Since 2004, Ontario has committed $1.35 billion, leveraging $15.62 billion in private-sector investments, which has helped support 70,524 direct automotive jobs, as well as thousands more in the auto supply chain. Recently, the government announced the following new investments:
- Automotive Supplier Competitiveness Improvement Program (ASCIP): $5-million, over two years, to support the automotive parts sector in adopting industry-leading software and hardware and to provide related training to increase the competitiveness of the industry in Ontario
- Honda: In January 2017, the government secured an investment by Honda of up to $492 million by committing up to $41.8 million for upgrades at its Alliston assembly plant. This includes a new state-of-the-art paint shop and leading-edge vehicle assembly technologies, as well as R&D, and will support future vehicle models while securing 4,000 direct jobs.
- Ford: In March 2017, the government secured an investment by Ford of over $1 billion by committing up to $102.4 million for projects including upgrades to its Windsor Engine Plant to preserve 500 jobs. The investment also establishes a global Connectivity Innovation Centre with almost 300 new engineering positions in Ottawa, Waterloo and Oakville, along with significant additional R&D expenditures.
Ontario’s Agriculture Sector
- Ontario’s agri-food sector contributes over $36 billion to GDP and supports over 800,000 jobs across the province. Since the 2013 announcement of the Premier’s Agri-Food Challenge, which involved the sector doubling its growth rate and create 120,000 jobs by 2020, the agri-food sector has created over 40,000 net new jobs.
- Greenhouse Competitiveness and Innovation Initiative: $19-million to help the greenhouse farming sector invest in innovative technologies, reduce production costs and increase productivity
- The government will continue to partner with other provinces, territories and the federal government to create Canada’s next agri-food policy framework (Working on Growing Forward 3)
Ontario’s Export Market Commitment
According to the Conference Board of Canada, every $100 million increase in exports creates approximately 1,000 new jobs.
- $50-million, over three years, to expand Ontario’s footprint in key international markets
Ontario’s Municipalities – Infrastructure Spending
Ontario invested $34 billion over the past three years and is planning to invest $156 billion over the next 10 years. Figures exclude third-party investments in hospitals, colleges and schools.
The Province’s updated commitment to make significant infrastructure investments includes:
- $56 billion in public transit
- $26 billion in highways
- More than $20 billion in capital grants to hospitals
Almost $16 billion in capital grants to school boards