Ontario Trucking Association

Ontario Trucking Association

March 14, 2008 11:09 ET

Ontario Trucking Association: McGuinty Weights in on Michigan Business Tax

Seeks Support of Michigan Governor for Reciprocity for Ontario Truckers, Auto Parts Makers

TORONTO, ONTARIO--(Marketwire - March 14, 2008) -

Attention: Business Editors

"In the interests of our continued success as trading partners," Ontario premier Dalton McGuinty is encouraging his counterpart in Michigan, Governor Jennifer Granholm, to "do everything in (her) power to see that the Michigan Business Tax Act (MBT) is appropriately amended" to restore tax reciprocity between the two jurisdictions or risk "(impeding) trade and worsen current economic difficulties."

McGuinty's comments are contained in a letter to the Governor, in which the Premier calls the new MBT "a tax barrier to cross-border trade that affects at least two of Ontario's key industrial sectors: automotive parts and trucking, both of which are major suppliers to Michigan's industry."

According to McGuinty "cross-border trade between Ontario and Michigan has flourished, in part, because of the elimination of taxes on foreign companies that do not have a permanent establishment in our respective jurisdictions. It is a long established practice in Ontario not to tax Michigan-based companies that do not have a permanent establishment in our province." And, he added, "nor does Ontario have a gross receipts tax," which is a key component of the MBT.

David Bradley, president of the Ontario Trucking Association, whose association, along with the Automotive Parts Manufacturers Association, has been leading the charge to get the MBT changed, welcomed the Premier's intervention. "This is precisely the kind of message that needs to be conveyed to the Michigan government; that the Ontario government is watching the situation closely and is very interested in an outcome that treats Ontario companies the same way Michigan companies are treated here."

OTA and the APMA have been working closely with the Canadian Consulate General in Detroit. Last month, a bill was passed in the Republican controlled state senate to restore tax reciprocity, and the associations are hopeful that an identical bill will soon be introduced in the House of Representatives which is controlled by the Democrats. Governor Granholm who is a Democrat, will ultimately have to sign off on any legislation.

OTA estimates that if imposed on Canadian trucking companies, the MBT could amount to an additional tax of $1,000 per truck per year. "When the industrial heartland of North America is already reeling from slower economic growth, off-shore competition and a thickening of the Canada-US border, this tax is not only unfair and inconsistent with international tax norms, it only serves to worsen an already dim economic situation for the region," says Bradley.

The Ontario Trucking Association (OTA) was founded in 1926, and provides services and public policy advocacy for trucking companies hauling freight into, out of and within the Province of Ontario. OTA member fleets operate over two-thirds of all commercial tractor-trailers on Ontario roadways and employ over 70,000 men and women who work in the trucking industry. www.ontruck.org.

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