A unified corporate tax system will be introduced to Ontario in 2009, ending the duplication of tax return, collection and audit procedures in the province.
In a joint press conference Friday, Federal Finance Minister Jim Flaherty and Ontario Finance Minister Greg Sorbara said the agreement should save provincial businesses up to $100-million in compliance costs.
“It is a classic example of government inefficiency held together with layers of red tape,” Mr. Flaherty said of the current system. “We can and must do better.”
The single tax form, single tax code and single tax administrator will see the federal government collect corporate taxes on behalf of Ontario, which Mr. Flaherty said would create a competitive climate to attract business and investors.
Under the change, some provincial employees will be transferred to the federal ranks, Mr. Sorbara said.
While Mr. Sorbara said the tax agreement represented “real progress”, the men could not reach an agreement on the topic of the Canada-Ontario Agreement.
According to Mr. Flaherty: “The Canada-Ontario Agreement is fully funded. Period.”
But Mr. Sorbara sees things differently.
“We simply don't accept the fact you can complete your obligations under that agreement by way of trusts and initiatives, as welcome as they are, that were provided for all Canadians,” Mr. Sorbara said. “That agreement was completely separate and apart from the trusts.”
