Buoyed by the business-friendly harmonized sales tax, Ontario’s economy has grown for the fifth straight quarter.
Finance Minister Dwight Duncan said Tuesday it’s “a fragile recovery because employment is still lagging,” but things are looking up after the global recession — thanks in part to the 13 per cent HST that took effect July 1.
According to newly released data, Ontario’s economy in the third quarter of 2010 grew at an annualized rate of 1 per cent and has grown 3.6 per cent since the recession ended in mid-2009.
But a positive sign, especially for the Liberals’ fortunes in the Oct. 6 provincial election, was that business spending on machinery and equipment has increased by more than 10 per cent due to the tax reforms.
“It is certainly in part due to the HST because (of) business tax credits and so on, the input tax credits they get,” Duncan said in an interview.
“We had large announcements by companies as diverse as Telus and Bell about precisely this kind of thing,” he said, adding new equipment helps Ontario workers be more efficient and competitive.
“And that helps address perhaps what is one of the fundamental challenges that is left in the economy and that’s productivity.”
The increased spending on equipment happened even though the Canadian dollar continued to remain strong against the U.S. greenback.
“We’re very satisfied that the economy is coming back,” Duncan said, stressing there are still concerns about the unemployment rate, which Statistics Canada pegged at 8.1 per cent last month.
However, he noted Ontario has regained 96 per cent of jobs lost during the recession and that last year there were 119,700 net new jobs created — seven out of eight of them full time.
Duncan took a swipe at NDP Leader Andrea Horwath, who has promised to exempt the 8 per cent provincial portion of the 13 per cent HST from energy bills and raise corporate taxes $850 million annually to pay for the subsidy.
“Perhaps the worst thing you could do right now is raise corporate taxes,” he said, calling on Progressive Conservative Leader Tim Hudak to also explain what he would do if elected in October.
On Monday, Hudak insisted “everything is on the table” when it comes to reducing taxes, including possible slashing the HST rate to 12 per cent or exempting gasoline from the provincial share of the tax.
But the Tories are not expected to outline their platform plans until spring.
NDP MPP Peter Tabuns (Toronto Danforth), meanwhile, mocked the Liberals for inferring that everything is coming up roses.
“I’ll say this, they’re very good at spinning,” said Tabuns, reminding the governing party that it had forecast an increase in gross domestic product of 2.7 per cent in last year’s budget.
“It’s far less than the Liberals were projecting. What they had in that third quarter after the HST came in was 1 per cent annualized growth,” he said.
Finance Minister Dwight Duncan said Tuesday it’s “a fragile recovery because employment is still lagging,” but things are looking up after the global recession — thanks in part to the 13 per cent HST that took effect July 1.
According to newly released data, Ontario’s economy in the third quarter of 2010 grew at an annualized rate of 1 per cent and has grown 3.6 per cent since the recession ended in mid-2009.
But a positive sign, especially for the Liberals’ fortunes in the Oct. 6 provincial election, was that business spending on machinery and equipment has increased by more than 10 per cent due to the tax reforms.
“It is certainly in part due to the HST because (of) business tax credits and so on, the input tax credits they get,” Duncan said in an interview.
“We had large announcements by companies as diverse as Telus and Bell about precisely this kind of thing,” he said, adding new equipment helps Ontario workers be more efficient and competitive.
“And that helps address perhaps what is one of the fundamental challenges that is left in the economy and that’s productivity.”
The increased spending on equipment happened even though the Canadian dollar continued to remain strong against the U.S. greenback.
“We’re very satisfied that the economy is coming back,” Duncan said, stressing there are still concerns about the unemployment rate, which Statistics Canada pegged at 8.1 per cent last month.
However, he noted Ontario has regained 96 per cent of jobs lost during the recession and that last year there were 119,700 net new jobs created — seven out of eight of them full time.
Duncan took a swipe at NDP Leader Andrea Horwath, who has promised to exempt the 8 per cent provincial portion of the 13 per cent HST from energy bills and raise corporate taxes $850 million annually to pay for the subsidy.
“Perhaps the worst thing you could do right now is raise corporate taxes,” he said, calling on Progressive Conservative Leader Tim Hudak to also explain what he would do if elected in October.
On Monday, Hudak insisted “everything is on the table” when it comes to reducing taxes, including possible slashing the HST rate to 12 per cent or exempting gasoline from the provincial share of the tax.
But the Tories are not expected to outline their platform plans until spring.
NDP MPP Peter Tabuns (Toronto Danforth), meanwhile, mocked the Liberals for inferring that everything is coming up roses.
“I’ll say this, they’re very good at spinning,” said Tabuns, reminding the governing party that it had forecast an increase in gross domestic product of 2.7 per cent in last year’s budget.
“It’s far less than the Liberals were projecting. What they had in that third quarter after the HST came in was 1 per cent annualized growth,” he said.
