Provincial Budget Offers a Mixed Bag, Businesses Still Going to Face Significant Challenges – Sault Chamber
Yesterday’s Provincial Budget offers a few items worth noting, including some new money for infrastructure and transportation but does little to address the growing burden on Ontario’s businesses and does not adequately address Northern Ontario concerns about a major project.
Transportation and Infrastructure:
The budget shows that the provincial government is dedicated to investing in Ontario’s transportation infrastructure. Transportation infrastructure funding will increase by $2.6 billion, bringing the overall value to $31.5 billion available over a 10 year span. Approximately $16 billion will be spent in the Greater Toronto Area (GTA) however, $15 billion will be spent on other infrastructure outside of the GTA.
Sault Ste. Marie is a transportation hub along the TransCanada highway. We will most likely see some of the infrastructure funding be put towards improving local highways and other transportation infrastructure used by our local business community.
There will be a $5 million increase to the Ontario Municipal Partnership Fund, a program that helps northern communities with infrastructure needs. Also, the development of the Port of Algoma is an important factor in expanding trade in the province. This will label the Algoma region as an infrastructure priority by the province. Sault Ste. Marie can expect to see improvements being made to accommodate increased transportation traffic coming from the new port.
These funding increases combined with the reinstatement of the Connecting Links program will provide a good amount of funding to develop priority infrastructure in Sault Ste. Marie and help Ontario remain economically competitive.
Cost Burdens for Ontario Business:
Ontario is home to the highest electricity rates in North America. The province is attempting to relieve large businesses of a portion of this cost burden through programs like the Industrial Conservation Initiative (ICI) and the Northern Industrial Electricity Rate (NIER) program. Both of these programs have been expanded in the 2015 budget. The ICI will lower the threshold required to qualify from five megawatts down to three; this will mean that a higher number of businesses will now qualify for ICI. The NIER program will see investments of up to $120 million and is set to be extended beyond March 2016.
According to Mark Barsanti, President of the Sault Ste. Marie Chamber of Commerce, “both of these programs are important to local commerce. There are local businesses who rely on the NIER program to supplement their electricity costs and this budget signals good news for them.”
He continues, “However, even with these programs, Ontario’s high electricity costs continue to make it difficult to attract investment and remain competitive in global market. The government will have to find a way to lower electricity rates.”
The province’s businesses will also shortly be required to deal with the implementation of the Ontario Retirement Pension Plan (ORPP). The 2015 budget indicates that the province will follow through with the 2017 implementation of the ORPP. This indication is clear through the government’s commitment to establish a body that will be responsible for administering the new plan. Sault Ste. Marie businesses will be impacted by the ORPP and some will likely be forced to find alternative ways to cover mandatory contributions.
Both hydro rates and the ORPP have been identified through Ontario Chamber of Commerce surveys as the largest barriers for Ontario businesses.
The Ring of Fire:
The 2015 budget renews the government’s commitment to invest $ 1 billion into necessary infrastructure required to further develop the Ring of Fire. This contribution is substantial but not new.
Notes Barsanti, “at this point, there is no transportation infrastructure in place for the mine and it appears, very little agreement between the province and federal government on the issue. The Ring of Fire is a project that will sustain a high number of jobs in the province and contribute billions of dollars to our provincial GDP. Sault Ste. Marie would see increased transportation traffic through the city and send many skilled workers to work in the mine. The mine will directly aid in reducing the provincial debt leaving more funding to be allocated to programs that could economically develop Ontario. As a community, and a region, we need to do more to encourage all levels of government to work toward realistic funding commitments for the Ring of Fire within a realistic time-frame”.