Speech from the Throne

To: Executive Council, Riding Presidents, Area Coordinators & OLP/OLF staff

Today’s Speech from the Throne marked the launch of our new, five-year plan for a more Open Ontario.

Following up on today’s conference call briefing on the Speech from the Throne led by Yasir Naqvi, President of OLP – please find the following documents attached to assist you and your local Liberals on the key points on the Open Ontario plan:

1. Open Ontario slide deck

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As requested on the conference call – reminder of key points on Tax Reform & HST & the Green Energy Plan:

2. Tax Reform & HST key points

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3. Green Energy Act key points

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Here are some great links to circulate –

To learn more about the Open Ontario plan, visit ontario.ca/openontario.

Missed the Throne Speech? Visit http://www.premier.gov.on.ca/news/thronespeech.php to watch a video of the full speech or for a transcript.

Tax Reform & HST Key Points

What is the HST?
As announced in the 2009 Ontario Budget, the Provincial Sales Tax (PST) will be replaced with a more modern, value-added tax that will be combined with the federal Goods and Services Tax (GST) to create a Harmonized Sales Tax (HST) for Ontario, effective July 1, 2010.
The provincial portion of the HST will be eight per cent and the federal portion will be five per cent, for a combined HST rate of 13 per cent.

Why the HST
Ontario’s comprehensive tax package, including the harmonized sales tax, will create jobs by making Ontario more competitive and provide personal tax relief.
We have a choice: we can refuse to fix what’s broken, resign ourselves to the idea that Ontario will be less competitive, and watch our province move backward. Or we can move forward, embrace change and hold firm to the conviction that Ontario can emerge through this stronger than ever before.
How it works
The fact is, our current sales tax structure hurts job creation.
Right now the PST is charged on many purchases made by businesses in manufacturing goods and providing services. It penalizes business by taxing them at every step in the production, distribution and retail processes – making it a tax on a tax on a tax.

Roughly $4.5 billion in embedded sales tax is hidden in the cost of doing business in Ontario. It drives up costs to consumers and places Ontario’s businesses at a competitive disadvantage. Most countries we compete with for jobs don’t have that disadvantage.

The HST will generally remove this hidden tax by refunding sales taxes paid on most business inputs. These refunds will mean lower prices for many consumer purchases and lower business costs, which experts agree will improve the competitiveness of Ontario businesses and result in increased business investment, leading to more jobs and higher incomes.

HST Rebates and Exemptions

83 per cent of consumer purchases will not see a new tax.

The HST will not be charged on the following items that are currently not subject to PST:
• Basic groceries
• Prescription drugs
• Certain medical devices
• Child care
• Residential rents
• Municipal public transit
• Most health and education services
• Legal aid
• Most financial services
• Tutoring
• Music lessons

Consumers will not have to pay the provincial portion of the HST for:
• Qualifying prepared food and beverages sold for $4.00 or less
• Print newspapers
• Children’s clothing and footwear
• Children’s car seats and car booster seats
• Diapers
• Feminine hygiene products
• Books (including audio books)
Buyers of new homes will receive a rebate of up to $24,000 regardless of the price of the new home. The HST will not apply to purchases of resale homes.

Cuts to Personal Income Tax
• 93% of Ontario taxpayers will get a personal income tax cut on January 1, 2010.
• All Ontario taxpayers will see a 16.5% cut in the tax rate on their first $37,106 of taxable income – that’s the lowest rate of any province in Canada.
• Ontario families and individuals with up to $80,000 of income will get an average personal income tax cut of 10%.

Transition Payments
Replacing the PST will help eliminate the hidden sales tax that many products carry. Few people realize that the PST is charged on various businesses costs throughout the supply chain. This hidden tax is ultimately added into the cost the consumer pays at the cash register. However, there will be a transition period as businesses adjust prices to reflect their cost savings.

• Eligible families – including single parents and senior couples – with an annual income below $160,000 will receive three payments totalling $1,000.
• Eligible individuals with an annual income below $80,000 will receive three payments totalling $300.
These transition payments will be delivered to eligible Ontario tax filers aged 18 and over in June 2010, December 2010 and June 2011.
Low-income support
• Almost 3 million low-income Ontario families will receive a new, permanent sales tax credit of up to $260 for each adult and child per year – one of the most generous in Canada.
• 90,000 Ontario taxpayers with low incomes will pay no Ontario personal income tax thanks to changes included in the comprehensive tax package.
• A new Ontario property tax credit will provide an additional $270 million in property tax relief every year to low- to middle- income Ontario homeowners and tenants.

The Green Energy Act: A Vision for the Future

Ontario’s Green Energy Act (GEA), and related amendments to other legislation, received Royal Assent on May 14, 2009. Regulations and other tools needed to fully implement the legislation were introduced through the month of September 2009, as part of a ten step plan to bring the Green Energy Act to life.

The landmark Green Energy Act will boost investment in renewable energy projects and increase conservation, creating green jobs and economic growth to Ontario.

This legislation is part of Ontario’s plan to become a leading green economy in North America. The Green Energy Act will:

• Create 50,000 jobs for Ontarians in its first three years.
• Spark growth in clean and renewable sources of energy such as wind, solar, hydro, biomass and biogas in Ontario.
• Create the potential for savings and better managed household energy expenditures through a series of conservation measures.

Green Jobs for Ontarians, Today and Tomorrow

Building a stronger, greener economy with lasting, well-paying jobs for Ontarians is a key goal of the GEA. This would be achieved by:

• Providing certainty and clarity in the approvals process for renewable energy projects.
• Enabling domestic content requirements for renewable energy projects, creating job opportunities here at home.
• Helping local communities and First Nation and Métis communities to build, own and operate their own renewable energy projects.
• Expanding our electricity grid to make it “smart”.

North America’s Renewable Energy Leader

The GEA will expedite the growth of clean, renewable sources of energy, like wind, solar, hydro, biomass and biogas, helping Ontario become North America’s leader in renewable energy.
Specifically this would be achieved by:

• Creating a Feed-in Tariff that guarantees specific rates for energy generated from renewable sources.
• Establishing the right to connect to the electricity grid for renewable energy projects that meet technical, economic and other regulatory requirements.
• Establishing a one stop streamlined approvals process, providing service guarantees for renewable energy projects that meet regulatory requirements.
• Implementing a 21st century “smart” power grid to support the development of new renewable energy projects, and prepare Ontario for new technologies like electric cars.

Creating a Culture of Conservation

Using less energy is the smart strategy for our economy and our environment. Energy conservation allows the province to simultaneously create green jobs, improve productivity and reduce emissions, while at the same time helping Ontarians to manage their energy costs.

The GEA will continue to make energy conservation a priority in the province by setting the stage for:

• Making energy efficiency a key purpose of Ontario’s building code.
• Establishing North American leading energy efficiency standards for household appliances, making energy efficient products more available to more consumers.
• Creating new financing tools to help consumers manage the up-front costs of small-scale renewable energy projects.
• Setting electricity conservation targets for local utilities and helping them to deliver effective programs to households and businesses.
• Requiring targeted conservation measures to protect low income Ontarians from increases in energy prices.

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