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Northern Ontario declared tax incentive zone

On January 1, all of Nothern Ontario will become a tax incentive zone in which eligible new and expanding businesses will receive major tax breaks, Premier Ernie Eves announced today.
Eves

On January 1, all of Nothern Ontario will become a tax incentive zone in which eligible new and expanding businesses will receive major tax breaks, Premier Ernie Eves announced today.

The following is the full text of a news release from the Office of the Premier:

**************************************************************** Eves announces tax incentive zone covering all of northern Ontario

MATTAWA, ON, May 9 - Ernie Eves, Ontario's Premier, today announced that the province's first and largest tax incentive zone will encompass all of northern Ontario. "Tax incentive zones will attract new and growing businesses to Ontario, creating a stronger economy in smaller, rural and northern communities," said Eves.

"They will give our young people the opportunity to live, work and raise a family in the communities where they grew up."

Tax incentive zones were initially announced in the 2002 Throne Speech and Budget. They are designed to encourage both large and small businesses to invest and expand in smaller, rural and northern communities.

They also support the government's Smart Growth strategy of building strong, vibrant and prosperous communities all across the province.

Today's announcement means that eligible businesses locating in northern Ontario would not be required to pay provincial business education tax, capital tax or employer health tax.

Municipalities will be asked to provide full municipal property tax relief for all eligible businesses.

These tax incentives will be in place for 10 years beginning January 1, 2004.

Additional pilot tax incentive zones will be established in southern Ontario. "Together with our partners, we're building a program that will attract new and growing companies to northern Ontario," said Eves.

"If communities want to grow, we want to help. I believe these innovative partnerships are a powerful tool to attract investment and create jobs."

**************************************************************** Backgrounder Northern Ontario Tax Incentive Zone will create jobs and build stronger communities

The Eves government's announcement that all of northern Ontario will be designated a tax incentive zone will lead to a stronger economy in smaller, rural and northern communities.

This tax incentive zone will include all territory in the Districts of Muskoka, Parry Sound, Nipissing, Timiskaming, Cochrane, Manitoulin, Sudbury (including the City of Greater Sudbury), Algoma, Thunder Bay, Kenora and Rainy River.

Tax incentive zones will attract new and growing businesses to Ontario and give young people the opportunity to live, work and raise a family in the communities where they grew up.

How businesses will save

Under the Eves government's plan, eligible businesses locating in a tax incentive zone would not be required to pay the provincial business education tax, capital tax or employer health tax.

Municipalities will be required to contribute to the program by providing full municipal property tax relief for all eligible businesses as well as case-by-case assistance on municipal charges and fees. The northern tax incentive zone will be in place for 10 years, beginning January 1, 2004.

Additional pilot tax incentive zones will be established in southern Ontario.

Eligible businesses

The province, together with municipalities, will focus on attracting new value-added businesses, such as manufacturing and processing plants, in the fields of silvicultural equipment, mining equipment, millworks, wood products such as furniture and pre-fab homes, and new waste management and environmental technologies.

Municipalities that have identified a potential new investment will be required to submit a business case outlining the proposed business and an explanation of how the investment would benefit the local economy without hurting existing businesses.

A minimum of five jobs and a $100,000 investment must be committed to qualify for tax incentives.

Tax incentive agreements

Eligible businesses will enter into a tax-incentive agreement with the municipality and the province.

Protecting existing businesses

Eligible businesses must prove that existing businesses will not be disadvantaged by the incentive.

Businesses will not be eligible unless they can ensure that potential new investments contribute to the local economy without harming existing businesses.

Businesses that expand or relocate

Eligible businesses located in tax incentive zones will be eligible for tax incentives on the incremental portion of their investment when they expand.

Certain businesses from outside Ontario that relocate to a tax incentive zone will also be eligible.

Businesses that relocate from within Ontario to a tax incentive zone will not be eligible.

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