The Ontario government says it is prepared to lower corporate taxes, if necessary, in order to keep the province competitive with the U.S.
Economic Development Minister Brad Duguid says the provincial government is paying close attention to U.S. President Donald Trump’s plan to dramatically cut corporate taxes and is ready to respond should he succeed.
The White House announced a tax-reform package in April that included a proposal to significantly slash the top U.S. corporate rate from 35 per cent to 15 per cent.
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Ontario’s 2017 budget didn’t alter provincial corporate taxes, but budget documents boasted that the tax burden on businesses has dropped in recent years, well below that of the U.S.
Duguid said that competitive edge is important to Ontario’s economy and he wants to assure the business community the government intends to maintain it.
However, the minister wouldn’t say just how low Ontario would go in order to compete with America.
“We’ll do whatever we need to do to maintain our competitiveness,” Duguid said.
“I think it’s important for us to signal to our business community that we’re very conscious of what’s going on in the U.S. and we’ll be monitoring the actions down there very closely.”
The combined federal and provincial corporate income tax rate in Ontario is 26.5 per cent, which, according to the provincial government is competitive within Canada and internationally. Ontario businesses also must pay the Harmonized Sales Tax, and the province offers incentives that lower the tax burden on new business investment.