On March 25, 2020, Finance Minister Ron Phillips presented the March 2020 Ontario and Fiscal Update titled Ontario’s Action Plan 2020: Responding to COVID-19. The Finance Minister states the measures announced in the Action Plan are vital to deal with the COVID-19 threat to Ontario’s health and economy.
The Action Plan includes $17 billion in direct and indirect support during the COVID-19 pandemic. It is no surprise that a significant portion of the Action Plan is devoting funds to healthcare. $7 billion will be dedicated to health care including $3.3 billion for hospitals, public health units and laboratories. Also, $1 billion will be held as a contingency fund. $10 billion will support individuals and businesses mainly through tax deferrals.
The government is projecting a deficit of $9.2 billion, however that deficit will more than double in 2020-2021 to $20.5 billion as a direct result of COVID-19.
The Action Plan also includes some relief for Ontario businesses in both direct support and in the form of deferrals which are highlighted below:
- Similar to the Federal government, Ontario will allow the deferral of personal and corporate tax payments for the next five months without penalty and interest. As a result, Ontario personal and corporate taxes are due by September 1, 2020. It should be noted that the Ontario measures include any “provincially administered taxes” and not just income tax.
- Workplace Safety and Insurance Board (WSIB) premiums will also be able to be deferred for six months. A lump sum will likely be required by the end of September 2020.
- The government will temporarily increase the Employer Health Tax exemption to $1million in 2020. This will provide businesses with immediate relief as they qualify for this exemption. This is expected to save businesses $355 million.
- The Action Plan includes proposed Regional Opportunities Investment Tax Credit. The credit aims to support regions lagging in employment growth. The credit will be made available to corporations, but details and eligibility are expected to be announced in the near future.
For individuals, the Action Plan provides direct financial support to parents and seniors:
- Parents with children 12 and under will receive $200 per child and $250 per child with special needs.
- Low income seniors will also see financial support as the Action Plan doubles the Guaranteed Annual Income System for the next six months.
- The Government is also deferring the payment of education property taxes to school boards to give municipalities further flexibility to provide residents and businesses with property tax deferrals.
- OSAP payments will also be suspended until September 30, 2020.
- To support parents working on the front line, the government is offering emergency childcare services.
For a full list of measures announced, please visit the Ministry of Finance website. If you have any questions related to the Economic Action Plan and the impact the proposed measures could have on your business, please don’t hesitate to contact us.