On March 24, 2021, Ontario Finance Minister Peter Bethlenfalvy tabled the 2021 provincial budget. No significant tax changes were introduced as the budget mainly focused on protecting the health of Ontarians and protecting the economy of Ontario. The province will spend $186.1 billion in 2021 and projects a deficit of $33.1 billion which is not expected to be balanced until 2029.
Defeating COVID-19
- The province is budgeting $1 billion to fund its ongoing vaccination campaign.
- $2.3 billion is being committed to fund COVID-19 testing and contact tracing.
- $1.8 billion is budgeted for tackling surgical backlogs.
Small Business Measures
- The Ontario Business Support Grant will pay a second round of funding to eligible businesses that experienced revenue declines during the pandemic and qualified for the first grant payment. Eligible businesses will not need to reapply as they will automatically receive the second payment. The grant will continue to pay $10,000 and up to a maximum of $20,000.
- The Ontario Tourism and Hospitality Support Grant will be created to provide funding to hard-hit tourism and hospitality businesses. The $100 million program will provide eligible businesses with one-time payments between $10,000 and $20,000. Note any businesses that qualified for the Ontario Business Support Grant will not be eligible for this new grant.
- The Regional Opportunities Investment Tax Credit enhancement will double and allow eligible corporations to claim a 20% credit for investments made in eligible geographic areas of Ontario. Eligible expenditures in excess of $50,000 and up to $500,000 in a year for property that becomes available for use in the corporation’s taxation year beginning March 24, 2021, and ending before January 1, 2023, will be eligible for the enhanced 20% credit.
- The Ontario government supports the federal government’s plan to modernize the General Anti‑Avoidance Rule (GAAR) and encourages combating artificial income shifting through the use of trusts or corporate continuances.
Individual Support Measures
- A third round of payments for parents will be provided through the Ontario COVID-19 Child Benefit which will double to $400 per child under 12 and $500 per child under 21 with special needs. Parents who received the last direct payment will not have to apply for the third round of payments. Parents who did not apply for the previous payments will be able to apply for the third payment.
- The Ontario Childcare Access and Relief from Expenses (CARE) tax credit will see a one-time 20% enhancement which will provide about $250 more per child. This tax credit was initially announced in the 2019 provincial budget and provides support of up to 75% of eligible childcare expenses. The top-up would be 20% of the normal tax credit.
- The new Job Training Tax Credit is a refundable tax credit that will provide eligible individuals up to $2,000 to cover half the cost of eligible expenses for Ontarians attending job training programs. The credit will be available to eligible residents of Ontario between the ages of 25 and 65 that have a 2021 Canada training credit limit greater than zero.
- As initially announced in the 2020 Budget, the province will proceed with the 2021 Ontario Senior Home Safety Tax Credit which will provide a 25% refundable credit on up to $10,000 of eligible expenses incurred to make a home more accessible for seniors.
Resources
News Release – Ontario’s Action Plan
Annex – Details of Tax Measures
Please contact Fazzari + Partners LLP if you have any questions. We can offer tax advice that best meets your unique circumstances. Get in touch by email: info@fazzaripartners.com or phone: 905.738.5758
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.
