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Ontario Budget 2024 Highlights

Last updated: Apr. 18, 2024 

Ontario Budget 2024 Highlights

On March 26, 2024, the Ontario Provincial Budget was released by Finance Minister Peter Behlenfalvy.

The Budget is anticipated to result in deficit of $3 billion for 2023 – 2024, $9.8 billion for the 2024-2025 budget year, and $4.6 billion for the 2025-2026 year.

No corporate or personal tax rate changes were made, but the budget extended and expanded some existing credits.

Here we’ll provide a summary of key highlights for Ontarians across the province.

Corporate Tax

Corporate tax rates for Ontario were not changed:

Corporate Income Ontario Rate Combined Provincial + Corporate Rate
General 11.5% 26.5%
M&P 10% 25%
Small Business* 3.2% 12.2%

*tax rate on the first $500,000 of active business income, shared amongst an associated group.

Ontario Computer Animation and Special Effects Tax Credit

The Ontario Computer Animation and Special Effects (OCASE) Tax Credit is a refundable corporate income tax credit of 18% for companies engaged in computer animation and special effects activities for eligible film and television productions in Ontario. This credit is currently tethered to either the Ontario Film and Television Tax Credit or the Ontario Production Services Tax Credit for eligibility.

The government is proposing changes to remove the tethering requirement and implement new eligibility rules to ensure the credit supports professional productions. The proposed changes include:

  1. Requiring a qualifying corporation to incur a minimum of $25,000 in Ontario labor expenditures for each film or television production for which the OCASE Tax Credit is claimed. This threshold can be met in the taxation year of the claim or cumulatively between the taxation year of the claim and the previous one. Once this threshold is met within two taxation years for a specific production, related expenditures in subsequent years become eligible.
  2. Excluding certain types of productions from eligibility, such as instructional videos, music videos, and gaming videos.

These new rules would apply to productions where the qualifying corporation begins computer animation and/or special effects work on or after March 26, 2024. The aim is to streamline and focus the tax credit support on professional productions in the industry.

Personal Tax Measures

The Ontario government made no changes to personal tax rates, but tax brackets have been adjusted. For 2024, they are as follows:

2024 Tax Brackets Tax Rates
Up to $51,446 5.05%
$51,446 to $102,894 9.15%
$102,894 to $150,000 11.16%
$150,000 to $220,000 12.16%
$220,000 and over 13.16%

Other Tax Measures

Gasoline and Fuel Tax Rate Cuts Extended

In July 2022, the Ontario government lowered the gasoline tax rate by 5.7 cents per liter and the diesel fuel tax rate by 5.3 cents per liter.

Originally, the reduction was scheduled to end on June 30, 2024, after which the rates would go back up to 14.7 cents per liter for gasoline and 14.3 cents per liter for diesel.

The government now plans to extend the reduction for an additional six months until December 31, 2024.

Tobacco Tax Act Review

The 2024 Ontario Budget proposes changes to the Tobacco Tax Act including administrative changes that would strengthen oversight and reduce burden on registrants including:

  • Starting in July 2024, the monthly filing deadline for tobacco tax registrants would shift from the tenth to the twenty-eighth of each month. This adjustment aims to provide registrants with additional time to file and to synchronize with other tax filing deadlines.
  • Strengthening fines to help tackle contraband tobacco that are in contravention of the Tobacco Tax Act and the Smoke-Free Ontario Act, 2017.

Alcohol Taxation and Fees Reduced

The Ontario government has stopped the projected 4.6% increase in the beer basic tax and Liquor Control Board of Ontario (LCBO) mark-up rates, which were set to take effect on March 1, 2024. This increase was tied to inflation, a measure consistently waived by the government over the past six years. This current freeze will extend for two years, until March 1, 2026.

As well, the government is proposing the removal of the 6.1% basic tax on Ontario wine and wine coolers sold at on-site winery retail stores and preparing Ontario-based producers for the transition to a more open alcohol marketplace.

A targeted review of taxes and fees on beer, wine, and alcoholic beverages will be conducted to promote a more competitive marketplace for both Ontario-based producers and consumers.

Review and Revision of Current Tax Systems

Carbon Pricing

Prior to any implementation of a new provincial carbon pricing program, the government will introduce legislation that requires a public referendum.

Property Reassessments

The current deferral of property reassessments will continue until the review of the property assessment and taxation system is completed. Consultations with stakeholders is expected to begin early spring.

Vacant Home Tax

The Vacant Home Tax is a municipal tax applied to the assessed value of vacant homes. The tax is intended to increase housing supply to encourage property owners to sell unoccupied homes or make them available to be rented.

Currently, the Vacant Home Tax is applied in Toronto, Ottawa, and Hamilton.

The Government of Ontario extended the authority for all single- and upper-tier municipalities to impose the Vacant Home Tax, effective March 27, 2024.

Property Tax

Effective immediately, Ontario municipalities are permitted to reduce municipal property tax rates on new purpose-built multi-residential properties to encourage their development.

Non-Resident Speculation Tax Amended

The 2024 Budget announced changes to the Non-Resident Speculation Tax (NRST).

The changes are effective March 27, 2024, and include:

  • Extending the rebate application deadline for permanent residents
  • Applying NRST to a standalone purchase of a parking space or storage unit

Additional clarifying amendments to strengthen the compliance framework for the tax

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