Masterson: “More to be done to attract investments in Ontario’s chemistry industry”
January 12, 2017
In advance of the drafting of the 2017 Ontario Budget, the Chemistry Industry Association of Canada (CIAC) has been actively engaged in key advocacy initiatives on behalf of its members. On January 10th, Bob Masterson, CIAC President and CEO, had the opportunity to participate in a pre-budget roundtable discussion hosted by the Honourable Charles Sousa, Ontario Minister of Finance.
Hearing the fiscal concerns raised by participants in the roundtable, Masterson took the opportunity to highlight the ways in which the chemistry industry, as solutions provider, can make significant contributions to many areas of the Ontario economy. “To achieve those contributions however,” Masterson explains, “the province will need to encourage economic growth by improving the investment environment.”
While the Chemistry industry has been in decline for more than two decades in Ontario, the sector does have several strengths to spur growth. These include:
- Sarnia’s proximity to cost-competitive shale gas production in the northeastern U.S.;
- established clusters with key infrastructure and skilled labour;
- the combined federal/provincial corporate tax rate of 25%;
- accelerated capital cost allowance treatment for manufacturing machinery; and
- the onset of commercialization of new technologies for producing chemicals from biomass.
These strengths have contributed to CIAC member companies making over $1 billion in new production capacity in Ontario since 2012. However, the province has the potential to attract much more chemistry investment activity. Based on historical trends, it should have seen a further $8 to $10 billion worth of investments.
Only economic growth will deliver the solutions needed to address the investment gap and generate jobs and prosperity for Ontarians. Action in the areas of: taxation, environmental regulation, Ontario’s regulatory framework, the integrity of industrial lands, and industrial electricity rates could all improve the investment conditions.
On January 20th, CIAC will have another opportunity to present its detailed recommendations in the identified areas when Don Fusco, CIAC’s Director, Government and Stakeholder Relations – Ontario, appears before Standing Committee on Finance and Economic Affairs as part of the 2017 pre-budget consultation.