/Posthaste: Ontario’s tax cut is just the start — more relief may be on the way

Posthaste: Ontario’s tax cut is just the start — more relief may be on the way


Good Morning!

Ontario revealed its Fall Economic Outlook and Fiscal Review yesterday that will see corporate income tax rates decline to 3.2 per cent from 3.5 per cent starting January 1, 2020.

But BMO Capital Markets’ senior economist Robert Kavcic says the tax cut will be partly offset by a reduction in the non-eligible dividend tax credit rate.

The overall review though, is “far less concerning” than previous policy statement that featured ambitious cuts to spending, the economist noted. Indeed, if the the global fiscal conditions remain stable Ontario will likely be a driver of Canadian growth and a relative outperformer, especially now that the housing sector has turned the corner.

“While spending restraint remains a key theme, the Province has softened their stance somewhat in this update by letting some of the revenue upside flow back into program spending,” said Kavcic said in a note to clients.

“As for tax relief, major changes were always going to be a later-in-the-mandate phenomenon, and if the economy cooperates, Ontario could have some capacity to roll out more relief.”

Here’s what you need to know this morning:

 

  • Prime Minister Justin Trudeau will meet with meet with Richard E. Neal, Chairman of the Committee on Ways and Means of the United States House of Representatives, along with Foreign Affairs Minister Chrystia Freeland in Ottawa
  • Ontario Finance Minister Rod Phillips introduces the legislature of the 2019 Ontario Economic Outlook and Fiscal Review in Toronto
  • Residential Mortgage Industry Report – quarterly data from CMHC at 8:30 AM ET
  • Future of Alberta’s electricity system is topic of energy symposium held by the Centre of Applied Business Research in Energy and the Environment at the University of Alberta in Calgary
  • Clean Energy Conference featuring First Nations in Vancouver
  • Notable Earnings: WSP Global, CGI Group Inc., Osisko Gold Royalties Ltd, Intact Financial Corp., Equitable Group Inc., Barrick Gold, Spin Mater, Iamgold Corp., TeraGo, Keyera Corp., SSR Mining Inc., B2Gold Corp., Western Forest Products Inc.

China will resume imports of Canadian pork and beef, ending a four-month impasse that locked exporters out of a crucial market at a time of fraying relations between the two countries, writes Naomi Powell.

China’s decision to reopen its market to Canadian meat comes as its pork inventory has bottomed out following National Day celebrations. Unable to replenish those supplies in time for Chinese New Year festivities at the end of January, Beijing has been looking to alternate sources of supply, said Christine McCracken, a senior industry analyst at Rabobank in New York.

“They’ve lost just over half of their own herd because of African swine fever, their inventory is depleted and it’s not coming back,” McCracken said. “So effectively they’ve run out of pork. That may be why they’re looking past some other issues.”

 

— Please send your news, comments and stories to yhussain@postmedia.com. — Yadullah Hussain @yad_Fpenergy

With files from The Canadian Press, Thomson Reuters and Bloomberg

 

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