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Ontario 2014 Budget - May 2, 2014
All proposals are subject to legislative approval. An election was held on June 12, 2014, which resulted in a Liberal majority government. They have indicated that they will present the same budget as the previous one below.
Personal Tax Measures
The Ontario 2014 Budget proposes to change the taxable income threshold for the top tax rate of 13.16%, from $514,090 to $220,000, and introduce a new tax rate of 12.16% for taxable income between $150,000 and $220,000. The new thresholds of $150,000 and $220,000 will not be adjusted for inflation each year. These changes apply to the 2014 and later taxation years. See the table of marginal tax rates for Ontario, which has been revised for these changes. Our Income Tax Calculators include these changes.
Dividend Tax Credits
As previously announced in the November Ontario 2013 Economic and Fiscal Review, the tax credit rates for non-eligible and eligible dividends will be revised to 4.5% and 10% respectively. The surtax calculation will be revised so that dividend tax credits will have the same value for all taxpayers, regardless of their income. This revision was previously included in our table of Ontario tax rates, and is also included in our Income Tax Calculators for the 2014 taxation year.
Ontario Retirement Pension Plan (ORPP)
 | will build on key features of the CPP, and could later be integrated with the CPP should negotiations on an enhancement be successful in the future. |
| would require equal contributions to be shared between employers and employees, not exceeding 1.9% each (3.8% combined) on earnings up to a maximum annual earnings threshold of $90,000. |
| maximum earnings threshold would increase each year, consistent with increases to the CPP maximum earnings threshold |
| those already participating in a comparable workplace pension plan would not be required to enrol in the ORPP |
| earnings below a certain threshold would be exempt from contributions, similar to the CPP |
| government will consult to determine how best to assist self-employed individuals in achieving a secure retirement future |
| ORPP would be introduced in 2017 to coincide with the expected reductions in Employment Insurance premiums |
Business Tax Changes
Small Business Deduction
Currently, the small business deduction is available for all Canadian controlled private corporations (CCPCs) for the first $500,000 of active business income. The budget proposes to eliminate the deduction for CCPCs with taxable capital of $15 million or more, and reduced on a straight-line basis for corporations having taxable capital over $10 million.
Aviation Fuel Tax
The budget proposes to increase the tax rate on aviation fuel by one cent per litre each year for 4 years, beginning in 2014 on the day following Royal Assent of an amendment to the Gasoline Tax Act. Subsequent rate increases would be effective on April 1 of 2015, 2016 and 2017. The current rate is 2.7 cents, so would be 6.7 cents per litre effective April 1, 2017.
Tobacco Tax Changes
The budget proposes to increase the tobacco tax rate from 12.35 cents to 13.975 cents per cigarette and per gram of tobacco products other than cigarettes and cigars, effective 12:01 a.m. May 2, 2014.
See Ontario Budgets: past editions for more information on the 2014 Budget.
Revised: October 26, 2023