Ontario Acts to Counteract Rising Dollar, Interest Rates, and High Energy Prices

Ontario doled out some ax break to corporations this week and targeted several industries -- including auto makers, the entertainment sector and the mining industry -- for a dollop of assistance.

The Ontario budget revealed the province will move up a reduction in the capital tax before eliminating it in 2010, double the rebate it gives to purchasers of hybrid vehicles and provide a tax break for Ontario-based video game developers.

Mr. Duncan pointed out, however, that high oil prices, rising interest rates and the strong Canadian dollar are expected to dampen economic growth in the province this year, to 2.3 per cent from an estimated 2.7-per-cent rate last year.

The rise in the value of the dollar alone is expected to dampen corporate profits this year, cutting profit growth to 3.8 per cent from 14.1 per cent in 2004 and an estimate of 6.2 per cent for last year.

Read more here.