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Contents
  1. Overview
  2. Business Income Tax Measures
  3. Personal Income Tax Measures
  4. Estate Administration Tax
  5. Other Measures

Overview

The Ontario Government plans to spend more than they’ll earn in revenue during 2019-2020 resulting in a deficit of $10.3 billion. There are no changes in corporate or personal tax rates. The government introduces the Ontario Childcare Access and Relief from Expenses (CARE) personal tax credit and eliminates the Estate Administration Tax.

Specific Measures Include:
• Reduction in the expenditure threshold to receive the corporate Interactive Digital Media Credit
• Introduction of the personal Childcare Access and Relief from Expenses credit
• Elimination of the Estate Administration Tax on the first $50,000 of estate value

BUSINESS INCOME TAX MEASURES

Corporate Tax Rates

Ontario corporate income tax rates remain unchanged at the following rates:

 

Ontario

Combined

Fed. + ON

General 11.50% 26.50%
M&P 10.00% 25.00%
Small Business (on 1st 500k) 3.50% 12.50%

 

Ontario research and development credits

The Ontario Innovation Tax Credit (OITC) is being reviewed. The government has said that it will consult with businesses to develop a plan in the coming months.

Ontario media tax credit certification

The government plans to review the cultural media tax credit process to reduce the application backlog.

Ontario Interactive Digital Media Tax credit

The minimum expenditure on labor required to qualify as a specialized digital game corporation is reduced to $500,000 from $1M. This is the expenditure required to have been spent within a taxation year on the development of digital games in order to qualify for the credit.
The change is effective for tax years beginning after April 11, 2019.

PERSONAL INCOME TAX MEASURES

Personal Tax Rates

Ontario personal income tax rates remain unchanged at the following rates:

Combined Fed. + ON 2019
Interest and Regular Income 53.53%
Capital gains 26.76%
Eligible dividends 39.34%
Non-eligible dividends 47.40%

 

Ontario Childcare Access and Relief from Expenses (CARE) credit

The CARE credit is a new credit introduce in this budget, applicable starting with the 2019 tax year.

The credit provides up to $6,000/child under the age of seven and up to $3,750/child aged 7 – 16, and $8,250/child with a severe disability. The credit is calculated on the amount of the taxpayer’s eligible chard care expenses multiplied by specific credit rates, which decrease as family income increases, eventually eliminated when family income is over $150,000.

For tax years beginning in 2021, taxpayers will be allowed to choose to apply for advance payments throughout the year or receive a single payment on the filing of their returns.

The schedule for calculation of the CARE credit is the following:

 

Ontario CARE tax credit rate calculation
Family Income % of eligible child care expenses
Up to $20,000 75.00%
$20,000 – $40,000 75% less 2% for each $2,500 (or part thereof) over $20k
$40,000 – $60,000 59% less 2% for each $5,000 (or part thereof) over $40k
$60,000 – $150,000 51% less 2% for each $3,600 (or part thereof) over $60k
Great than $150,000 0.00%

 

ESTATE ADMINISTRATION TAX

The Estate Administration Tax has been eliminated for the first $50,000 of estate value. The tax applies to the value of over $50,000 at a rate of 1.5%.

The filing deadline for the Estate Administration Tax Information Return has been extended from 90 days to 180 days following the receipt of the estate certificate. The deadline for filing the amended information returns is also extended from 30 days to 60 days.
All changes relating to the EAT take effect on January 1, 2019. The government plans to look for additional options for EAT relief in the future.

OTHER MEASURES

Tax Integrity

A specialized tax expert unit has been created to work with federal and provincial officials to identify and address tax loopholes and abuse.

Property Tax Assessment System

The government plans to review the property tax system for options to improve the accuracy and stability of property tax assessments, support a competitive business environment and provide relief to residents, among other things. The government will look for input on these issues from residents, municipalities, and other stakeholders.

The information in this commentary is current as of April 12, 2019. This publication has been carefully prepared and written in general terms for your guidance only. The preceding commentary cannot be relied upon to cover specific situations and you should act or not act based on the information contained herein. To discuss these matters in your particular circumstances, please contact:

Download the full PDF version of the Ontario Budget Commentary 2019.

If you have any questions regarding the new budget, please contact or email Shawn Bausch, Assistant Tax Manager or Jerry Paskowitz, Partner.

OUR LEADERSHIP TEAM

Allen Sloan 416-649-7700
Irving Feldman 416-649-7708
Jerry Paskowitz 416-649-7702
Alon Roitberg 416-649-7714
Greg McRae 416 649 7706
Hammad Sheikh 416-649-7707
Michael Spigelman 416-649-7709
Lorne Davidson 416-649-7722

 

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