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Ontario’s Sousa presses Flaherty to delay tax credits for big business until 2018

On the day before his first budget, Finance Minister Charles Sousa, left, sent a letter to his federal counterpart, Jim Flaherty, right, asking that the start of input tax credits for large corporations be delayed until 2018.

CHRIS YOUNG AND ADRIAN WYLD/THE CANADIAN PRESS

Big businesses in Ontario may have to wait a few years longer before they can start writing off the HST on corporate meals.

On the day before his first budget, Finance Minister Charles Sousa sent a letter to his federal counterpart, Jim Flaherty, asking that the start of input tax credits for large corporations be delayed until 2018.

Under the current plan, these tax credits, which will allow companies to write off sales tax on such things as entertainment expenses, were to be phased in by 2015.

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The left-wing New Democratic Party, however, has demanded that Mr. Sousa cancel the credits for big corporations as a condition for supporting his budget. His letter to Mr. Flaherty does not go quite this far, but asks for the credits to take effect only after the province balances its books.

"Eliminating the deficit is the single most important step the province can take to grow the economy," Mr. Sousa wrote in his letter.

He also asked Mr. Flaherty to ensure that Canada Revenue Agency be vigilant in enforcing tax rules on the credits.

The province had been reluctant to meet NDP demands on taxes, since the federal government collects many revenues on the province's behalf. But it has tried to satisfy NDP requests: last month, Mr. Sousa wrote another letter to Mr. Flaherty asking that the federal government crack down on corporations that dodge taxes by moving money between provinces.

The minority Liberals need the NDP's support to pass the budget and continue governing.

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About the Author
Washington correspondent

Adrian Morrow covers U.S. politics from Washington, D.C. Previously he was The Globe's Ontario politics reporter. He's covered news, crime and sports for The Globe since 2010. He won the National Newspaper Award for politics reporting in 2016. More

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