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Ontario's budget: the revenue side Add to ...

While the lion’s share of deficit-slaying in Ontario’s 2012 budget comes courtesy of spending cuts, the Liberals are also banking on an extra $4.4-billion in revenue to balance the province’s books.

Much of that additional cash is expected to come through a freeze on corporate tax rates. But to hit their target, the government is also counting on Ontarians to indulge their vices – to roll the dice and imbibe as a way to pad provincial coffers.

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Gambling

The Liberals have made no secret of their willingness to profit off so-called sins – Finance Minister Dwight Duncan intimated as much in an announcement earlier this month about his intention to open a casino in Toronto.

The budget he laid out on Tuesday plans for $600-million in additional revenue from gambling through 2015, and an additional $1-billion a year by 2017-18.

This is accomplished, in theory, largely through shifting responsibility for the Ontario Lottery and Gaming Corp.’s day-to-day operations and capital assets to the private sector wherever possible.

The budget also lays out broad plans to change the way Ontario Lottery and Gaming operates: A new fee model is in the works for municipalities with gaming sites, and more stores will be able to sell lottery tickets. The budget also refers to “reconfiguring the number and location of gaming sites and tailoring the type of gaming at those sites” to boost revenue.

Drinking

It’s no secret Ontarians (or many of them, anyway) like their liquor. That thirst translates into a budgetary boost for governments: By its own estimates, the Liquor Control Board of Ontario contributed $2.3-billion to public coffers in 2010, including a $1.55-billion dividend to the Ontario government, $102-million in PST, $301-million in GST/HST, $346-million in excise taxes and import duties and additional payments to municipalities.

Tuesday’s budget lays out plans to increase the LCBO’s net revenue by $100-million a year through unspecified “efficiencies” in 2013-2014. The next several years are expected to bring in an extra $100-million each – through measures to “enhance profitability in a socially responsible manner,” according to Mr. Duncan’s budget document.

Selling the LCBO’s head office is projected to bring in an additional $200-million net.

Corporate taxes

Keeping corporate taxes where they are is both a cash-boosting gambit and a conciliatory bone thrown to Andrea Horwath’s New Democratic Party, which stands to decide whether the government lives or dies by this budget.

The general corporate income tax rate was set to drop to 10 per cent by July, 2013, after dropping from 14 per cent in 2009 to 12 per cent in 2010 to 11.5 per cent last year. The plan now is to keep it at 11.5 per cent until the budget's balanced. This will make for an estimated $1.5-billion over three years.

Fees

Need to rid yourself of some hazardous waste? It'll cost your business more, per tonne, as of next year, translating into a projected $2.5-million annually starting in 2014-15.

The province’s thirstiest commercial and industrial water users can also expect to pay more: The province plans to expand the pay base for high-consumption water users, as well as the rate they pay (set at $3.71 per million litres when the program was established in 2007. This will hit construction, petroleum, mining and food production sectors, as well as recreational facilities.

The province doesn’t know what the new rate will be, but hopes to bring in $3.5-million in 2013–14, $6-million annually starting in 2014–15.

Businesses can also expect to pay more to get government approval for any activity affecting the environment. Updating this fee system (unrevised since 1998, the budget notes) is supposed to net $3.8-million a year starting in 2013-14.

in addition to increases in existing transportation-related fees, the province hopes to toll the new Highway 407 East, between the east end of Highway 407 and Highway 35/115.

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