In this edition:
Government of Ontario to cut gas and fuel taxes July 1
Business Outlook Survey confirms issues with labour, supply chains
Consumer inflation expectations reach record-high levels
Government of Ontario to cut gas and fuel taxes July 1
The Ontario government is introducing legislation that would, if passed, cut the gas tax from 14.7 cents per litre to 9 cents per litre, while the fuel tax rate, which includes diesel, would be reduced from 14.3 cents per litre to 9 cents per litre for six months beginning July 1, 2022.
The government projects that a family in Southern Ontario who owns two cars and drives “regularly” would save about $815 in 2022.
If the legislation is passed and the rate decreases on July 1, 2022, importers, wholesalers and retailers that hold tax-paid inventory at the time of the rate cuts would be required to take inventory to receive a credit in the amount of the difference. Consumers would be charged the lower tax rate beginning July 1, 2022. In this instance, the Ministry of Finance would provide a tax adjustment for registered collectors and importers to reimburse them for the adjustment they will provide to their retailers.
Ontario’s Gas Tax program supports public transit in municipalities across Ontario by providing two cents per litre of provincial gas tax to improve and expand transit. The Ontario government has promised that this funding would not be impacted by this proposed cut.
The Ministry of Finance will be hosting outreach sessions in the coming weeks to educate and work with the industry on delivering this proposed tax change.
Business Outlook Survey confirms issues with labour, supply chains
In the Bank of Canada’s first-quarter 2022 Business Outlook Survey, reports of labour-related capacity constraints and supply chain challenges remain widespread. Given these pressures and robust demand, businesses anticipate stronger price growth—and they expect the Russian invasion of Ukraine to add more cost pressures. As public health restrictions ease, firms that were hit hard during the pandemic anticipate their sales will pick up.
Consumer inflation expectations reach record-high levels
The Bank of Canada’s Survey of Consumer Expectations for Q1 2022 found that short-term inflation expectations have reached record-high levels. Many survey respondents think inflation will be higher over the next two years because of supply disruptions and the COVID‑19 pandemic. This includes inflation for essentials like food, gas and rent.
Most believe that supply issues will impact inflation for at least two years and will impede authorities’ ability to control inflation. Consumers think the Russian invasion of Ukraine will make high inflation worse.
Although workers anticipate significant price increases in the near term, they believe their wages will increase only modestly. This is a source of dissatisfaction for them.
Reading Recommendations
What to expect in the 2022 federal budget
The National Post
Finance Minister Chrystia Freeland will deliver this year’s federal budget on April 7, the first since the last general election that saw the Liberals return for a second minority mandate.
What can we expect? More spending in national defence, a costly carbon capturing tax credit, dental care as per the agreement with the NDP. Here is a round-up of different things to watch out for in Freeland’s document coming later this week.
Federal Budget Must Address Canada’s Competitiveness Problem
Ontario Chamber of Commerce
“Canadians continue to feel the effects of the pandemic on their pocketbooks. Recent increases in energy costs serve as a challenge and an opportunity for our economic recovery. This is a watershed moment to tap into our sustainable natural resource wealth to support national energy independence and establish our competitiveness in the green global economy,” said Rocco Rossi, President and CEO of the Ontario Chamber of Commerce. “Canada’s 2022 budget must focus on providing Canadian businesses the right conditions to make us a strong, resilient, and competitive nation.”
The OCC’s 2022 Ontario Economic Report found that a staggering 62 percent of sectors are facing labour shortages in Ontario and expect to continue facing them over the next year. Together with supply chain disruptions, these shortages are impacting the cost of living, service delivery, and product availability.
Budget 2022: Critical choices at a critical time
Canadian Chamber of Commerce
The Canadian Chamber of Commerce’s President and CEO, Perrin Beatty, issued the following statement today ahead of Thursday’s federal budget.
“This Thursday Finance Minister Freeland will present the government’s spending plans for the next few years. She will no doubt take great care in sketching out the immediate impacts for helping Canadians improve the quality of their lives.
However, we need much more than a simple description of how the government intends to spend (or “invest,” which has become Ottawa’s preferred euphemism) our tax dollars. Budgets, when done well, should also lay out a strategy to grow the nation’s economy, and with equal care demonstrate how their spending will provide an economic return. Responsible politicians understand that the standard of living for every Canadian must be underpinned by a thriving private sector.”
Update on Ukraine
Canada announces it will impose additional sanctions on Russian and Belarusian regimes
The Honourable Mélanie Joly, Minister of Foreign Affairs, today announced that Canada intends to impose new sanctions under the Special Economic Measures (Russia) Regulations and the Special Economic Measures (Belarus) Regulations in response to the Russian regime’s illegal and unjustifiable invasion of Ukraine and the Belarusian regime’s support of it.
The upcoming measures will impose restrictions on nine Russian and nine Belarusian individuals for having facilitated and enabled violations of Ukraine’s sovereignty, territorial integrity and independence. These individuals are close associates of the Russian and Belarusian regimes.
Through the Daily Updates, the GNCC aims to deliver important business news in a timely manner. We disseminate all news and information we feel will be important to businesses. Inclusion in the Daily Update is not an endorsement by the GNCC.
