Ontario 2017 Budget - April 27, 2017
All proposals are subject to legislative approval. Bill 127, Stronger, Healthier Ontario Act (Budget Measures), 2017 received Royal Assent on May 17, 2017. This bill does not include all the tax measures announced.
Bill 134, Budget Measures Act (Housing Price Stability and Ontario Seniors' Public Transit Tax Credit), 2017 received Royal Assent on June 1, 2017. This includes the land transfer tax.
Bill 177, Stronger, Fairer Ontario Act (Budget Measures), 2017 was tabled on November 14, 2017. It includes changes regarding the Caregiver Credit, and changes to the wording regarding the Seniors' Public Transit Tax Credit.
Ontario Health Insurance Plan+ (OHIP+): Children and Youth Pharmacare
Starting on January 1, 2018, OHIP+: Children and Youth Pharmacare will provide universal drug coverage to all children and youth aged 24 and under, regardless of family income. It will completely cover the cost of all medicines funded through the Ontario Drug Benefit (ODB) Program. There will be no deductible and no co-payment. For more information see the Budget information Helping Parents.
Ontario Student Assistance Program (OSAP)
This program is being changed to make postsecondary education more accessible and affordable for Ontario students and their families, including mature students. For more information see the Budget information Helping Students.
Starting this summer, Ontario's proposed Fair Hydro Plan will reduce electricity bills by 25% on average for eligible households, also benefiting approximately 500,000 small businesses and farms. Effective January 1, 2017, there will also be a rebate of the provincial portion of the Harmonized Sales Tax (HST) for residential customers and eligible farm and small business consumers.
Further changes were also announced - for more information see the Budget information Helping with Everyday Costs.
Personal Tax Measures
Ontario proposes to replace the provincial caregiver and infirm dependant tax credits with a new Ontario Caregiver Tax Credit (OCTC), similar to the Canada Caregiver Tax Credit, beginning in the 2017 taxation year. The following changes apply, and are reflected in the table of Non-refundable Tax Credits for 2017:
Seniors' Public Transit Tax Credit
This new tax credit will be available for the 2017 taxation year for senior Ontarians aged 65 and older at the end of 2016. See our article on the Seniors' Public Transit Tax Credit.
Multijurisdictional Tax Filers
Amendments are proposed to change the way provincial surtax and the Ontario Tax Reduction (OTR) are calculated for Ontario residents who pay tax to another province, and non-residents of Ontario who pay tax to Ontario, to ensure consistency between the surtax and OTR treatment for multijurisdictional filers and other filers. These changes will be effective for the 2017 and later taxation years.
The surtax will be calculated based on the total amount of Ontario tax on taxable income. The total amount of tax payable, including the surtax, will then be prorated based on the percentage of income allocated to Ontario. The OTR amounts will also be prorated based on the percentage of income allocated to Ontario. See Ontario Tax Reduction on the Ontario website.
Other Proposed Tax Measures
- amending the Taxation Act, 2007 to parallel changes made to the federal small business deduction that would reduce a company's Ontario business limit by the same amount the federal business limit is reduced. This would apply if the company assigned any portion of its business limit to another company under certain circumstances. See Corporate Income Tax on the Ontario website.
- granting municipalities the authority to levy a hotel tax
- changing the Fuel Tax Act so that certain coloured biodiesel fuels could be sold tax-exempt when used for specified purposes. See Fuel Tax on the Ontario website.
- eliminating the Employer Health Tax (EHT) exemption for any employer that is a designated member of a partnership, as defined in the Income Tax Act. This change would take place no earlier than January 1, 2018, to provide opportunity for feedback and consultation. See Employer Health Tax on the Ontario website.
- reviewing other methods and structures by which some employers avoid paying EHT, to ensure EHT relief is targeted to smaller employers.
- increasing tobacco tax rates from 15.475 cents to 16.475 cents per cigarette or gram of tobacco products other than cigars, effective 12:01 a.m. April 28, 2017. In both 2018 and 2019, tobacco taxes will be increased by an additional 2 cents per cigarette or gram of tobacco. See Tobacco Tax and About Raw Leaf Tobacco on the Ontario website.
- changes to modernize railway right-of-way taxation
- changes to reduce property tax rates for eligible small-scale value-added and commercial activities on farms
- moving forward with Provincial Land Tax (PLT) reform, to further support increased equity in taxation and in how services are paid for in the north.
Other topics from the Ontario budget, on the Ontario website:
- Transfer Tax and Payments in Lieu of Federal and Provincial Corporate Tax (Hydro PILS) - re application of hydro PILS against a taxpayer's Transfer Tax liability
See the Ontario website for the complete Ontario 2017 Budget.
Revised: May 27, 2018
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