Highway cash, tax cuts and rebate highlight budget

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TORONTO, Ont. – Ontario has unveiled a balanced budget that eliminates sales taxes on insurance premiums and warranty repairs, increases spending on provincial highways, and lowers corporate income tax rates.

It was the fifth budget for Finance Minister Ernie Eves, a former fleet executive from northern Ontario. And one of the highlights was an unprecedented “dividend” cheque of up to $200 to be mailed this fall to each of the province’s taxpayers.

The province will phase out the five per cent retail sales tax on automobile insurance by one percentage point per year, until it’s eliminated in 2004. (The first drop begins today.) Also being eliminated by 2004 is the eight per cent provincial sales tax on warranty repairs and replacements – with an immediate drop to six per cent as of today.

While Eves acknowledged high fuel costs, he didn’t offer any relief in fuel taxes, noting that these improvements would go directly to taxpayers. There have been questions about whether consumers would see pump prices change with tax relief.

The province’s infrastructure, meanwhile, will see a $1-billion investment in 2001 – a record for the province. And a quarter of that will go to northern highways such as highways 11 and 69, with another $600 million promised over the next four years.

The province will also cut the general corporate income tax rate to eight per cent by 2005, while the amount of income eligible for the rate is being increased to $400,000 from $200,000.

The budget drew immediate kudos from the Ontario Trucking Association. Said association president David Bradley, “A balanced budget, plus the combined tax cuts and infrastructure investment commitments contained in this budget represent a landmark achievement.” n

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