On November 5, 2020, Ontario Finance Minister Rod Phillips introduced the 2020 provincial budget. No significant tax changes were introduced as the budget mainly focused on three pillars: protect, support and recover in light of the COVID-19 pandemic. The government has tabled a $45 billion response package over the next three years with some of the notable measures highlighted below. The government projects a $38.5 billion deficit decreasing to $33.1 billion next year and $28.2 billion the following year. The Finance Minister acknowledged that the current level of spending is not sustainable but is necessary today. However, no plan for balancing the budget was included.
- Starting January 1, 2021, commercial and industrial hydro bills will be subsidized as the government absorbs the cost from renewable energy deals
- Ontario businesses will see property tax reductions as Finance decreases the Business Education Tax Rate charged to businesses
- Permanently increase Employer Health Tax exemption limit to $1 million going forward
- Freeze wine and beer tax until 2022
- Direct funding to museums, fairs and art institutions
- Proposed extension for the filing deadline to claim the Ontario Research and Development Tax Credit (ORDTC) to match the federal extension for scientific research and experimental development claims. Corporations with tax year-ends from September 13, 2018 to December 31, 2018 would have an additional six months to file a claim; corporations with tax year-ends from January 1, 2019 to June 29, 2019 would have until December 31, 2020 to file an ORDTC claim. No similar extension was provided for the Ontario Innovation Tax Credit.
- Deadline extensions are also proposed for various cultural media tax credits
- Ontario Senior Home Safety Tax Credit will provide a 25% refundable credit on up to $10,000 of eligible expenses incurred to make a home more accessible for seniors
- Support for parents will be provided by the end of the year. Parents can expect to receive $200 per child under 12 and $250 per child under 21 with special needs
- Ontario will work with tourism operators and introduce a 20% Ontario Tourism Credit on eligible tourism expenses incurred by Ontario residents
Other Spending Measures
- $8.3 billion to frontline workers and $572 million to Ontario hospitals
- $1.7 billion to strengthen long term care homes and build new beds
- $30M to group homes and children aid societies
Please contact Fazzari + Partners LLP if you have any questions. We can offer tax advice that best meets your unique circumstances.
The information in this article is of a general nature and is in summary form and may not include all the details noted in the Budget. Contact one of our tax professionals to discuss these matters in the context of your situation before acting upon such information.