Environment

Become an early adopter of electric vehicles

In Toward a low-carbon economy, the Institute recommended Ontario increase the affordability of electric vehicles and the prevalence of charging stations. The accessibility of electric vehicle charging stations is one of the main concerns preventing customers from transitioning from traditional automobiles. To address this concern, Ontario has committed $20 million to constructing 500 electric vehicle charging stations in more than 250 locations. As part of its Climate Change Action Plan, Ontario will offer rebates to households replacing older vehicles with plug-in hybrid and electric models and work with manufactures to reduce emissions. As outlined in Open for Business, by responding to the needs of customers and becoming one of the most electric car friendly provinces, Ontario can gain the first-mover advantage and become the leading region in fuel efficient car production.

Implemented in 2016

Infrastructure

Make strategic infrastructure investments

Ontario lags behind its peers in both measures of productivity and infrastructure per worker. In Better foundations, the Institute recommended that the government prioritize infrastructure projects based on their productivity benefits. Ontario has included expected impact on productivity, long-term return on investment and economic competitiveness in its criteria for selecting infrastructure projects. We support Ontario’s long-term approach to infrastructure development and efforts to build the foundation for future growth and prosperity.

Implemented in 2016

Taxation

Eliminate the Labour Sponsored Investment Fund tax credit

This recommendation was based on the Institute’s research that illustrated Labour Sponsored Investment Funds (LSIFs) represent a significant burden on provincial treasuries as the fund’s median returns were well below returns on other Canadian small-cap equity.  LSIFs are sponsored by labour organizations to invest in small and mid-size Canadian businesses. Ontario residents would qualify for a tax credit of up to 15 per cent of the cost of their investments in LSIFs. The Institute proposed a reorientation of the Ontario tax regime towards boosting investment in high-quality organizations rather than extending investment support universally in Agenda for our prosperity and Today's innovation, tomorrow's prosperity.

Implemented in 2011

Taxation

Reduce high marginal effective tax rates on capital investment at the federal and provincial level

The Institute has lobbied for reducing taxes on these prosperity enhancing investments in Closing the prosperity gap, Realizing our prosperity potential, and Navigating through the recovery. This recommendation was borne on research that supporting business investment is one of the most proactive strategies to close the investment gap, which in turn offers the potential to close the prosperity gap. The attention to high marginal tax rates at the federal and provincial level have been a recurring theme for the Institute. High marginal effective tax rates on capital investments – the amount of tax paid on an additional dollar of income spent on capital investments – discentivizes business investment and distort the positive externalities to be gained for the province.

Implemented in 2010

Education

Rebalance education and health care spending

In Leaning into the wind, the Institute recommended that Ontario re-balance expenditure on education and health care as a disciplined strategy for future budgets. This was in response to the increased rate at which public investment in Ontario’s education trailed US peer state expenditure, as well as Ontario’s higher per capita expenditure in healthcare relative to education. In the 2013 Ontario budget, the government proposed over the next three years a $3.6 billion influx in capital grants for infrastructure in education, and a $3.5 billion investment in health infrastructure.

Implemented in 2013

Education

Address the challenge of high school dropouts

In Leaning into the wind the Institute has recognized poverty as a pertinent issue in Ontario and has found that one of the major drivers of poverty is the number of high school dropouts. This prompted the recommendation to tackle the high number of high school dropouts in the province. In order to successfully execute this strategy, students needed programs that informed and prepared them for the changing dynamics of the labour market at an earlier stage in their high school career. This would provide identifiable opportunities for students and would mitigate the revolving door of low income earners (high school dropouts) and raise individuals from the bottom of the income distribution.

Implemented in 2011

Education

Strengthen apprenticeship programs

Apprenticeships have proven to be an effective means of enhancing skills and promoting smooth transitions from school to employment. Based on research by the OECD, the Institute recommended that the province place an equal emphasis on apprenticeship programs as a viable alternative to post-secondary education in Leaning into the wind. These programs would generate significant economic and individual benefits to Ontarians. For this program to be successful, the Ontario government must allocate more resources in the provincial budget to increase participation while giving businesses the added financial incentive to offer the program.

Implemented in 2011

Taxation

Adopt a value-added provincial sales tax, harmonized with GST

In Path to the 2020 prosperity agenda, extensive research by the Institute on tax reform demonstrated that one of the most effective methods to stimulate investment and job creation was by integrating a value-added provincial sales tax, harmonized with the GST, into Ontario’s tax regime. The result would be twofold: the harmonized sales tax would improve Ontario businesses’ competitiveness and in the process would strive to build a more efficient tax system. Introducing a harmonized sales tax would be an important step towards building a “smarter taxation” system that would make Ontario one of the most business-friendly jurisdictions in the developed world.

Implemented in 2010

Taxation

Abolish capital taxes immediately

Capital taxes in Ontario were levied against corporations’ debt and shareholders equity. The more a firm invested, the more it paid regardless of whether the business was profitable. If a business experienced an unfavourable year it often had to borrow additional funds to pay its capital tax. The Institute’s research illustrated that the capital tax discouraged businesses from investing, which consequently affected advancements in technology, job creation and productivity growth. This led the Institute to propose abolishing the capital tax to increase business investment and reverse the slow rate of per capital economic growth in Ontario in both Investing for prosperity and Path to the 2020 prosperity agenda.

Implemented in 2010

Trade

Improve trade by supporting the Federal Government’s ongoing trade negotiations

In Trade, innovation, and prosperity, the Institute recommended Ontario do more to build trade relationships with China, the EU and India. Trade with these regions increases competitive pressures on Ontario’s businesses, strengthening productivity, investment, and innovation within the Province. In Going Global: Ontario’s Trade Strategy, the Ontario government committed to collaborating with the federal government to secure new trade agreements that advanced Ontario’s interests. Premier Wynne’s trade mission to India in January 2016 is an excellent example of this. The Province’s efforts to open up trade for businesses will lead to a more competitive and prosperous Ontario in the future.

Implemented in 2015

Business, Taxation

Speed up capital cost allowance (CCA) for new business investments

Since 2001, the Institute has tracked the province’s sub-par business investment output relative to peers as part of its focus on Ontario’s competitiveness. Ontario’s lagging performance prompted the Institute to recommend changes to the CCA to re-stimulate Ontario’s economy in Agenda for our prosperity. With an accelerated CCA, the government could encourage more business investment in the region. The change would make investments more attractive to businesses by allowing them to deduct more of the cost of an investment now and less in the future. This recommendation allows businesses to effectively plan, invest and help create jobs to stimulate the Ontario economy.

Implemented in 2013

Immigration

Invest in process for integrating immigrants more effectively into our economy

In Investing for prosperity, the Institute drew attention to the structural mismatch experienced by immigrants that limited their potential in the province.  Ontario attracts some of the world’s most highly skilled immigrants but has underinvested in programs to maximize their contribution to Ontario’s prosperity when they arrive.  A stronger commitment to immigration strategy was necessary for Ontario to take full advantage of the “brain gain” from the influx of highly skilled immigrants.  The Institute pushed for proactive programs based on matching and fully utilizing immigrants’ skill set, to increase Ontario’s prosperity levels.

Implemented in 2007