BUDGET RAISES QUESTIONS ABOUT ONTARIO’S FUTURE COMPETITIVENESS, CHEMISTRY INDUSTRY SAYS
May 1, 2014
The Chemistry Industry Association of Canada (CIAC) is concerned about the fiscal course charted in the 2014 Ontario budget, tabled at Queen’s Park this afternoon. While the budget emphasized jobs and prosperity, and held the corporate tax rate for manufacturing at 10 per cent, CIAC believes the government’s proposed spending could jeopardize future investments in the province.
“The government’s ability to balance its books and reduce debt will be key to Ontario’s economic future,” said Richard Paton, CIAC’s President and CEO.
“Although the government plans to reduce the deficit over a number of years, it’s hard to see how that can happen with the extensive expenditures outlined in this budget.”
Canada’s chemistry industry has a strong interest in maintaining a healthy economy in the province: Ontario is home to 45 per cent of Canada’s chemical production. The industry has also invested more than $500 million in Ontario in recent years, in part because of the province’s favorable corporate tax rate, and the availability of shale gas.
Given the right conditions, CIAC estimates that the chemistry industry could invest several billion more in new manufacturing capacity in the province over the next decade – bringing new, high-paying jobs along with it. However, strong fiscal management will be key; chemical manufacturers need to be confident that governments can address their fiscal challenges and eventually balance their budgets. The Ontario government currently spends almost $11 billion annually – more than nine per cent of its revenues – in servicing the province’s debt, leaving it vulnerable to interest rate increases.
“Ontario needs to chart a clear path towards renewed investment, growth and jobs while at the same time tackling its mounting debt and the deficit,” said Paton.
“Although that’s a tall order for any government, this budget falls well short of that goal.”
CIAC represents the interests of Canada’s leading chemistry companies – from petrochemical, inorganic and specialty chemical producers, to bio-based manufacturers and chemistry-related technology and R&D companies. Ontario’s chemistry industry employs 42,000 Ontarians directly, and supports another 210,000 jobs in the province’s economy.