Research and development (R&D) continue to play a pivotal and expanding role in Ontario’s strategy to accelerate its transition towards a knowledge-based economy, with two key initiatives introduced in its March 27 Budget. The creation of a centre of excellence for electricity and alternative energy technology (see page 6) and a new Cancer Research Institute of Ontario (see page 2) were the S&T highlights of the stage-managed event, which elicited more attention for its venue than its contents.
The Budget, which drew considerable criticism for being tabled outside the Legislature, also included several fiscal measures pertaining to S&T and innovation. A new apprenticeship tax credit has been introduced and changes will be made to the Ontario Business Research Institute Tax Credit, the Labour Sponsored Investment Funds (LSIF) and Community Small Business Investment Funds programs (see page 6).
The Budget Speech stated that the changes were geared to “strengthening Ontario’s R&D competitiveness and forging stronger links between the private sector and non-profit research institutes”.
At the macro level, Ontario is following the federal lead with the gradual elimination of provincial capital tax. It is also raising the threshold for its personal income surtax, which was introduced in the early years of the Progressive Conservative government’s first mandate.
The Budget projects FY03-04 spending of $70.6 billion, for an annual increase of more than 7%. It presents the province’s books as balanced but does not account for the cost of the province’s reversal of electricity deregulation.