Ontario to focus on keeping businesses competitive: McGuinty

Ontario must find more aggressive ways to help businesses remain competitive during the recession, Premier Dalton McGuinty said on Saturday.

Harmonized sales taxes and a focus on green energy may help Ontario weather the recession, McGuinty said while speaking to Liberal party members in Niagara Falls.

About 71,000 jobs were lost in Ontario in January.

McGuinty said he has been hearing from businesses that a harmonized tax would help them survive the recession.

The Ontario government is looking at harmonizing federal and provincial sales taxes, and the harmonized tax will likely be included in the province's budget, he said.

"There seems to be an emerging consensus around harmonization," he said.

Businesses currently pay eight per cent provincial sales tax and the five per cent federal goods and services tax on equipment and machinery, as well as on daily operating costs such as electricity.

The premier had tentatively raised the idea of merging PST and GST in January. The move would require co-operation with the federal government because it would reduce provincial revenues and increase the cost of household goods not subject to the tax.

"Consumers will be affected by this, and our treasury takes a hit, in the billions," he said. "That's the kind of thing we can only do with the support of the federal government."

Proponents acknowledge some prices could rise in the short-term, but they argue consumers would benefit in the long run because a single tax would lead to a much stronger economy.

Quebec, New Brunswick, Nova Scotia and Newfoundland and Labrador already have a harmonized sales tax.

The premier added that the province's Green Energy Act, when passed, will eliminate barriers that hold up renewable energy projects and help create jobs.

"We plan to proceed more aggressively than anybody else in North America when it comes to putting in place 50,000 new green energy jobs," he said.

McGuinty said carbon pricing is likely to have an impact on Ontario and "will create some challenges for some and real opportunities for others who are prepared."

"It's clear our world is changing and our businesses are going to have to be at their very best if they want to compete and win," he said.

McGuinty said government will be striving to help businesses by making investments in workers and making technology more affordable.