Ontario defers select taxes for businesses for 6 months amid U.S. tariffs

Queen’s Park is shown in Toronto, Feb. 20, 2023. THE CANADIAN PRESS/Frank Gunn

The Ontario government has announced it will give businesses a six-month deferral on some taxes to soften the blow of U.S. President Donald Trump’s “attacks” on the provincial economy.

In an announcement on Monday, the government said select provincially-administered taxes, including the Beer Wine and Spirits Tax and Gasoline Tax, will be deferred retroactively from April 1, 2025, to Oct. 1, 2025.

That will give businesses roughly $9 billion worth of cash flow to keep their workers employed and to “weather the economic turmoil.”

“That’s going to help companies tremendously,” Premier Doug Ford said at an unrelated event on Monday.

The government said that, in addition to the six-month tax deferral, it will also issue a $2 billion rebate for eligible businesses through the Workplace Safety Insurance Board (WSIB) to keep workers on the job.

“It’s for corporations who pay provincially-administered taxes, like fuel taxes and employer health taxes, so they can, basically get an interest-free loan for six months,” Ontario Finance Minister Peter Bethlenfalvy told Newstalk 1010 Monday morning. “And then WSIB is real cash, which allows them to hire more workers, protect workers.”

Last week, Trump announced “retaliatory tariffs” on dozens of countries, including a 10 per cent baseline tax on imports from all countries that run trade surpluses with the U.S.

Canada was spared from those levies, but is still subject to a 25 per cent tax on goods that don’t comply with the Canada-United States-Mexico Agreement (CUSMA), steel and aluminum, and auto imports.

In response, the Canadian government launched its own 25 per cent counter tariff on U.S. cars which are non-compliant under the North American free trade pact, in addition to the existing 25 per cent tariffs on $60 billion worth of other goods announced last month.

Although Ford previously said it was a “big relief” that Canada was left off Trump’s “reciprocal” tariff list unveiled last Wednesday, he has maintained that the president’s trade war could cost Ontario as many as 500,000 jobs.

“Let’s hope that President Trump comes to common sense here. The markets are tumbling again. Consumer confidence is down. Inflation’s happening. Investment has stalled. I’m thoroughly disappointed he’s taken this avenue,” Ford said.

Monday’s announcement comes one week before MPPs are set to return to Queen’s Park for the fist time since December. Ford has said that his first bill when the legislature returns will be aimed at eliminating inter-provincial trade barriers to unleash Ontario’s economic potential.

The government said the $11 billion in total relief is just a “first step” to support businesses and workers. In the lead up to his re-election in February, Ford said his government needed a “new mandate” if it was forced to spend tens of billions of dollars to save jobs.

With files from Siobhan Morris