Ontario Budget Announcement - 2019 ONTARIO BUDGET ANNOUNCEMENT - 2019 ONTARIO BUDGET HIGHLIGHTS On Thursday, April 11, 2019, Ontario Finance Minister Vic Fedeli tabled the province’s 2019 budget. The 2019 Ontario Budget includes significant new investments in health care, child care, education, and public transit. The government is introducing no new taxes in this budget, which sets out a five-year plan to attain a balanced budget. Along with measures announced to date, the budget projects spending of $26 billion over six years. Below are highlights from the announcements: A. Corporate Tax Measures Corporate Tax Rates No new corporate income tax rate changes have been announced in this year’s budget. The current corporate income tax rates for 2019 are outlined below: Small Business Rate General Rate Threshold Non-M&P M&P Federal 9.0% $500,000 15.0% 15.0% Ontario 3.5% $500,000 11.5% 10.0% Combined 12.5% 26.5% 25.0% As previously announced, the Ontario government does not propose to parallel the federal government in phasing out the small business tax rate for corporations with investment income in excess of $50,000. There is uncertainty whether the promised cuts to the province’s general corporate and small business tax rate will be made. The Ontario Job Creation Investment Incentive This incentive parallels the immediate write-off measures announced in the federal government’s Fall Economic Statement 2018. Under these measures: • Manufacturing and processing machinery and equipment and specified clean energy equipment can be immediately written off; and • Most other capital investments are eligible for the Accelerated Investment Incentive that provides a depreciation rate of up to three times the normal rate in the first year the asset is put in use. These measures are in place for assets acquired after November 20, 2018 and will be phased out from 2024 to 2027. Workplace Safety and Insurance Board (WSIB) Premiums The government has indicated that it is supporting the reduction of the WSIB average premium rate from $2.35 to $1.65 on every $100 of insurable payroll, effective January 1, 2019. Tax Evasion and Avoidance The Ontario government has indicated it is taking action to level the playing field for businesses by fighting tax evasion and avoidance. The government has created a specialized unit of tax experts in an effort to create a fair and transparent tax system to help Ontario complete for business investments. ONTARIO BUDGET ANNOUNCEMENT - 2019 B. Personal Tax Measures Personal Tax Rates The top marginal personal income tax rate for Ontario remains at 20.53 percent for 2019. The current top combined federal and Ontario marginal rates for 2019 are outlined below: Salary, business income, interest 53.53% Capital gains 26.76% Eligible dividends 39.34% Non-eligible dividends 47.40% Personal Income Tax Rates No changes were announced to the top tax bracket rate on income in excess of $220,000, which remains at 20.53 percent (53.53 percent when combined with the federal tax rate). Ontario Child Care Access The government proposes a new refundable Childcare Access and Relief from Expenses (CARE) tax credit, starting with the 2019 tax year. The CARE tax credit would be on top of the existing Child Care deduction and will focus benefits on low- and moderate-income families. The CARE tax credit will be based on family income and on eligible child care expenses allowed under existing tax rules. The refundable credit would be a percentage of the taxpayer’s eligible child care expenses multiplied by a specified credit rate. The credit rate starts at 75 percent and is reduced as family income increases above $20,000. The government is also committing up to $1 billion over the next five years to create up to 30,000 child care spaces in schools. The Low-Income Individuals and Families Tax (LIFT) Credit Effective January 1, 2019, this non-refundable LIFT credit provides up to $850 in Ontario personal income tax relief to low-income Ontario taxpayers who have employment income. Eligible taxpayers will be able to claim the LIFT credit when they file their 2019 tax return. The LIFT credit is reduced as income increases and will not be available to a taxpayer with more than $38,500 in net income, or to a family with more than $68,500 in net income. ONTARIO BUDGET ANNOUNCEMENT - 2019 C. Other Measures Estate Administration Act The government is proposing to provide relief for families of deceased persons with small estates. Effective January 1, 2020, the Estate Administration Act would eliminate probate fees for taxable estates with assets of $50,000 or less. Cultural Media Tax Credit Cultural media tax credits are administered jointly by the Canada Revenue Agency and Ontario Creates. Due to the large backlog of credit applications and long wait times for credit certification, the government is proposing to streamline administration of the application and approval process. Dental Care for Low-Income Seniors The government is introducing a new dental program for low-income seniors who lack benefits. Individual seniors with an annual income of $19,300 or less, or couples with combined income of $32,300 or less, will be able to receive dental services in public health units and other approved centres. The program is expected to begin by late summer 2019. ONTARIO BUDGET ANNOUNCEMENT - 2019 ABOUT MNP MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and not-for-profit sectors. Through partner-led engagements, we provide a collaborative, cost-effective approach to doing business and personalized strategies to help organizations succeed across the country and around the world. Ontario Region Contacts Name Region Phone Number Erin Lalonde Eastern ON 613.932.3610 Gavin Miranda Eastern ON 613.691.4224 Jason Skilnick Eastern ON 613.546.3111 Nick Korhonen Eastern ON 613.691.4245 Peter Bangs Eastern ON 613.691.4212 Dave Thompson GTA West 416.641.4935 Faisal Hadibhai GTA West 647.943.4105 Razik Sarsam GTA West 416.613.3121 Rosario Suppa GTA West 416.626.6000 Rene Deroy Northwestern ON 705.523.0272 Steve Blazino Northwestern ON 807.625.4845 Adom Postma South Central ON 519.772.7475 Bryan Walters South Central ON 289.293.2314 Fred Gallagher South Central ON 519.772.7494 Mike Veldhuizen South Central ON 905.225.1318 Doug Greenhow Southwestern ON 519.679.8550 John Humphrey Southwestern ON 519.679.8550 Melissa Aveiro Southwestern ON 519.679.8550 Ryan Devereux Southwestern ON 519.679.8550 Charlene Wang Toronto 647.475.8302 Colin Chambers Toronto 416.515.3826 Eddy Burello Toronto 647.943.4081 Le Van Toronto 416.515.5036 Brandon Hodge Toronto North 416.515.3840 Don Carson Toronto North 416.263.6930 Glenn Willis Toronto North 416.515.3850 Jeanne Cheng Toronto North 647.775.1768 Michael Saxe Toronto North 647.943.4120 ONTARIO BUDGET ANNOUNCEMENT - 2019 Andrew Lam International Tax - Toronto 416.263.6989 Anthony Bellomo International Tax - Toronto 416.515.5001 Costa Tsakiris International Tax - Toronto 416.515.5007 Frank Kacsandi International Tax - Toronto 416.515.3818 Kevyn Nightingale International Tax - Toronto 416.515.3881 Mark Pearlman International Tax - Toronto 416.260.3510 Melinda Nguyen International Tax - Toronto 416.515.3805 Michael Shumate International Tax - Toronto 416.260.3509 Tim Bloos International Tax - Toronto 416.515.3888 Tony Marchegiano International Tax - Toronto 416.613.3199 Kal Ruprai Indirect Tax – Toronto 416.515.3811 Neha Tiku SRED – Markham 416.515.3834 Jay McLean SRED – Waterloo 519.772.2986 Visit us at MNP.ca Praxity AISBL is a global alliance of independent firms. 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