On November 14, 2022, Ontario’s Finance Minister delivered the 2022 Ontario Economic Outlook and Fiscal Review. The outlook titled Ontario’s Plan to Build: A Progress Update expects economic growth and job creation to slow. For 2022–23, the government is projecting a deficit of $12.9 billion. Over the medium term, the government is forecasting deficits of $8.1 billion in 2023–24 and $0.7 billion in 2024–25. Over the three-year outlook period between 2022–23 and 2024–25, the government is projecting a cumulative $18.1 billion improvement in the deficit outlook and a cumulative $26.1 billion reduction in borrowing needs since the 2022 Budget. No major tax changes were announced however notable announcements from the economic outlook are discussed below. For complete details, please visit the Budget Ontario website.
Ontario Disability Support Program (ODSP)
Finance intends on raising the amount a person with a disability on the ODSP can earn, from $200 to $1,000 per month, without impacting their income support benefits. This measure would encourage people on ODSP who want to increase their work hours to do so and promote more participation in the workforce. For each dollar earned above $1,000, the person with a disability would keep 25 cents of income support.
For those who are unable to work, Finance increased ODSP rates by 5% and plans to adjust ODSP rates to inflation beginning in July 2023.
Increasing Financial Support for Seniors
The government plans to double the Guaranteed Annual Income System (GAINS) payment for all recipients for 12 months starting in January 2023. This measure would increase the maximum payment to $166 per month for single seniors and to $332 per month for couples, a maximum increase of almost $1,000 per person in 2023. They are also looking to introduce measures to expand eligibility in the coming months. Currently, eligibility is determined automatically for individuals who receive Old Age Security and the Guaranteed Income Supplement.
Temporary gas tax and fuel tax cuts
The economic outlook confirms the government’s intention to extend the temporary gas tax and fuel tax cuts for an additional 12 months. The government previously cut the gas tax and fuel tax rates on July 1, 2022 by 5.3 cents per litre. The government is proposing to extend the cuts to the gas tax and fuel tax rates so that the rate of tax on gasoline and fuel (diesel) would remain at 9 cents per litre until December 31, 2023.
Non-Resident Speculation Tax Rate
Effective October 25, 2022, the government increased the non-resident speculation tax rate from 20% to 25%. This tax applies to the purchase of a home located anywhere in Ontario by foreign nationals, foreign corporations or taxable trustees. Rebates remain available for foreign nationals who become permanent residents of Canada within four years after the tax became payable, if eligibility criteria are met. Rebate details are available on the Ontario NRST website.
Ontario Seniors Care at Home Tax Credit
The Ontario Seniors Care at Home Tax Credit is a refundable personal income tax credit to help seniors with eligible medical expenses, including expenses that support aging at home. The credit provides 25% of claimable medical expenses up to $6,000, for a maximum credit of $1,500. This amount will be reduced by 5% of family net income over $35,000. Individuals’ resident in Ontario that are 70 years of age or older or that have a spouse/common law partner 70 years of age or older are eligible. A detailed list of eligible expenses is available on the Ontario Seniors Care at Home Tax Credit website.
Film, Television and Media
The government is expanding Ontario’s film and television tax credits to professional film and television productions distributed exclusively online. In the coming months, proposed regulatory amendments to implement this measure will be provided for public review and comment. Furthermore, the government is looking to modernize various cultural media tax credits to encourage film and television production, computer animation and special effects activities, interactive digital media product development and book publishing in Ontario.
The economic outlook also confirmed the government’s intention to mirror various federal measures including immediate expensing for capital asset purchases and increasing the range to $10 million to $50 million for which the small business tax rate is phased out.
The information in this article is of a general nature and is in summary form. Contact one of our tax professionals to discuss these matters in the context of your situation before acting upon such information.