Hiring gains will depend on how companies use tax savings
Ontario is projecting 30,000 new jobs from an $8-billion business tax cut to encourage companies to expand operations and invest in equipment, technology and infrastructure.
The proposed Ontario Competitiveness Tax Cut is expected to generate $11 billion in additional capital investment and add $6 billion to the province's gross domestic product (GDP).
However, the government has not specified which industries would account for the new positions or when hiring is expected to materialize.
Job growth depends on business expansion
The measure would allow eligible businesses to immediately deduct 100% of qualifying capital investments, including machinery, software, fibre-optic cables, patents, certain vehicles and transportation infrastructure.
By reducing investment costs, the province hopes to encourage business expansion and employment growth. However, the impact on staffing will depend on whether companies invest in additional production capacity or prioritize automation and productivity improvements.
The proposal comes as Canada's hiring outlook shows signs of improvement. A September ManpowerGroup survey found that 37% of Canadian employers planned to increase staffing in the fourth quarter, compared with 17% expecting reductions.
"In the face of U.S. tariffs, our government is helping Ontario businesses invest, grow and remain competitive on the global stage by lowering the cost of investing and doing business," Finance Minister Peter Bethlenfalvy said.
"The Ontario Competitiveness Tax Cut will be a gamechanger for business investment in the province, supporting 30,000 new jobs as we continue working to make Ontario the most competitive business environment in the G7."
Tax relief comes amid workforce uncertainty
The announcement follows a period of staffing adjustments linked to trade uncertainty. A recent survey found that 77% of surveyed employers had made workforce changes, with tariffs among the factors influencing their decisions.
According to Ontario's 2026 Fall Economic Statement, the proposed measures would reduce the province's marginal effective tax rate (METR) on new business investment by 6.1 percentage points to 3.6%.
That would place Ontario below the reported averages for the United States at 16.9%, the Organisation for Economic Co-operation and Development (OECD) at 19%, and the G7 at 26%.
The changes would complement the federal government's Productivity Mega Deduction and depend on the passage of federal legislation.
Small businesses included in broader relief
The tax cut would provide more than $8 billion in provincial relief over five years, bringing total business investment tax relief to more than $12 billion when combined with previously announced measures.
It follows a separate small business tax cut in Ontario's 2026 budget, which is expected to benefit more than 375,000 businesses.
Eligible small businesses could save up to $5,000 annually, with total savings projected at $1.1 billion over three years. The government has not provided a separate employment forecast for this measure.
