The Ontario Budget was delivered by Minister Charles Sousa on March 28, 2018. The budget anticipates a surplus of $0.6 billion for 2017-18 and deficits of $6.7 billion of 2018-19 and $6.6 billion for 2019-20. Spending will increase, particularly in health care, education and social services.
The 2018 budget proposes the elimination of Ontario’s surtax and calls for changes to Ontario’s personal income tax rates and brackets. While there are no changes to corporate income tax rates, the budget provides increased tax credit rates through the Ontario Research and Development Tax Credit and the Ontario Innovation Tax Credit for qualifying companies.
Under the consumer protection umbrella, the government is:
- Proposing changes to the Access to Consumer Credit Reports and Elevator Availability Act, 2018 that would give consumers online access to their current consumer score at least twice a year free of charge, include in a consumer report information about any consumer scores given to third parties in the past 12 months and implement a credit freeze, at the request of a consumer. If passed, this would give Ontarians the strongest rights in Canada over information held by consumer reporting agencies.
- Introducing amendments to the Insurance Act, which, if passed, would include providing the Financial Services Regulator Authority with the authority to create rules requiring insurers to provide claims and repair history information to motor vehicle dealers for disclosure to prospective used vehicle purchasers.
The Budget also includes a number of other investments and tax measures, including but not limited to the following:
Cannabis Product Taxation
Government confirms that under an agreement with the federal government it will receive 75% of the federal excise tax collected on cannabis intended for sale in the province. The full 13% HST will apply to off-reserve purchases of recreational cannabis by a Status Indian when legalized (consistent with off-reserve purchases of alcohol and tobacco). For medical cannabis from a licensed producer, a registered Status Indian will remain eligible for a rebate of the 8% provincial portion of the HST for purchases delivered off-reserve.
Venture Technologies Fund
Budget proposes an $85 million investment in the fund over the next 10 years to help a select number of very high-potential fast-growing firms grow into world-class companies, helping them leverage their talent and commercialize their products and intellectual property.
The Transformative Technology Partnerships Fund
Budget pledges an investment of $50 million over next 10 years in this fund focused on transformative technologies, including artificial intelligence (AI), 5G wireless communications, autonomous vehicles, advanced computing and quantum technologies. Government hopes this will bring together businesses, technology developers and post secondary research institutions to work together on new products and services. Aim is to create and retain over 3,600 high value jobs, while attracting $1 billion in investments.
Ontario Interactive Digital Media Tax Credit
Budget proposes to extend eligibility to film and television websites purchased or licensed by a broadcaster and embedded in the broadcaster’s website. This change would apply to websites that host content related to film, television or internet productions that have not received either a certificate of eligibility or letter of ineligibility before November 1, 2017.
Microbrewers and Small Beer Manufacturers
Government proposes to amend the Small Beer Manufacturer’s Tax Credit and the definition of microbrewer in the Alcohol and Gaming Regulation and Public Protection Act, 1996, to encourage growth. Changes would be retroactive to March 1, 2018.
Charitable Donation Tax Credit
Budget proposes to increase the Ontario Charitable Donation Tax Credit rate to 17.5% for all eligible donations in excess of $200, effective January 1, 2018. A rate of 5.05% will continue to apply to the first $200 in donations.
It is important to note that this is the last Liberal government budget before the upcoming provincial election which is scheduled to be held on June 7, 2018. It is a foundation for the Liberal election platform as some of these plans will only happen if the Liberals win re-election.
You can read the full budget here.
Florentina G. Stancu-Soare| Manager, Regulatory Affairs| Canadian Marketing Association