Saturday, 07 November 2020 07:50

Friday, Nov. 6/20 Updates on Financial Assistance Programs

Good Morning All,

What a week this has been - we started with snow, now we're back to summer, our US neighbours are duking it out and.... we have some updates from our Provincial and Federal governments.
1. Federal Update on Rent and Wage Subsidy Programs
Last night the Federal Opposition Parties agreed after a lengthy four hour discussion to support the Liberals on the revised Rent, Wage and Top Up subsidy programs.  The plan is for the Legislation to pass these today.  The Senate has agreed to work quickly on their review and hopefully will do the final approval next week.  My hope is that these programs are in place for you in time for December 1st.
Here are links that will provide details on these programs - I've had to read through each of these twice this morning to try and get a general understanding.  I'm hoping that when the programs roll-out the details are a bit more user friendly. 
2. The Provincial Budget
Yesterday the Province presented their Fall 2020 budget and they included a number of programs that should financially help businesses.  Of note are the programs related to property tax and assessment.  The OBIAA (Ontario Business Improvement Area Association) has put together a very good summary which I've included below - please take some time to read through the details.

Government of Ontario's Fall 2020 Budget
Main Street Recovery Act, 2020
The Main Street Recovery Package and Main Street Recovery Act, 2020 targeted those businesses, as announced in October, who were forced to close their doors and were among the hardest hit; while the Better for People, Smarter for Business Package and Better for People, Smarter for Business Act, 2020 aimed at reducing Ontario’s regulatory burden placed on business by modernizing rules and digitizing government to save businesses time and money, while encouraging innovation. Both bills remain before the Ontario Legislature and we continue to look to you for your support in moving them forward.
The Main Street Recovery Grant which targets assistance of $1,000 per small main street business with 2-9 employees will open for applications later this month. Stay tuned for the announcement on the specific date or keep checking for updates.
Here are some of the highlights, please share with your businesses:
  1. A New Electricity Plan for Growth & Job Creation – the 2020 Budget outlines a plan to reduce the burden on employers of the high-cost energy contracts with non-hydro renewable energy producers. Starting January 1, 2021, roughly 85% of these high cost wind, solar and bioenergy contracts will be funded by the Province, not business ratepayers. Removing these costs from electricity bills will result in medium size (Class B) and larger industrial and commercial employers (Class A) saving about 14% and 16% respectively, on average, on their electricity bills. The Ontario Electricity Rebate will continue to protect households, farms and small businesses, including main street restaurants and retail shops.
  2.  A New Property Tax Plan for Employers – the 2020 Budget outlines the plan to reduce the burden on employers of varying business property taxes. To address this inequity, the Province will lower the significant Business Education Tax (BET) component of property bills to 0.88%. This will benefit over 200,000 business properties or 94% of all business properties in Ontario, providing an annual savings of $450M beginning in 2021.  
  3. A New Property Tax Plan for Small Businesses – the 2020 Budget will enable municipalities to partner with the province to reduce the burden on small businesses of business property taxes, by allowing municipalities to create a reduced small business property tax subclass. For all municipalities that agree to create a lower small business property tax subclass, the province will consider matching these municipal property tax reductions in order to provide further support for small businesses. Total municipal and provincial property tax relief for small businesses could total $385M by 2022-23.  The example provided my the Finance Minister showed that with both property tax reductions, a small bakery shop in Toronto with an assessment value of $1.5M could save $10,500 in property taxes annually.
  4. A New Employer Health Tax Plan for Small Business Employers – due to the COVID-19 Pandemic in March our government expanded our exemption from the Employer Health Tax (EHT) for 2020 from $490,000 to $1 million. In the 2020 Budget the Government is making this change permanent. This change will permanently reduce the EHT on a restaurant with $700,000 in payroll from $4,095 to 0, and would reduce the EHT on a Building Contractor with a payroll of $1.5 million from $19,695 to $9,750.  
  5. Ensuring Business Property Tax Assessments are based on permitted land use not speculative land uses – in the 2020 Budget to ensure the government is well-positioned to respond to input and any necessary amendments to the Assessment Act, the government is proposing the creation of optional new assessment tools to address concerns regarding assessments on permitted land use versus speculative land use.
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