Canada: 2015 Ontario Budget - April 23, 2015

Introduction

On April 23, 2015 Finance Minister Charles Sousa tabled his third Budget.

The deficit for the 2015-16 fiscal year is projected to be $8.5 billion, which is less than had been forecasted in the 2014 Budget. The deficit is projected to drop to $4.8 billion for 2016-17 and to be eliminated by 2017-18. Unlike the 2014 Budget, the 2015 Budget does not comment on achieving a surplus.

The Budget does not include any changes to Ontario's tax rates for individuals or corporations. From a business prospective, Ontario has decreased many of its tax credits including the Apprenticeship Training Tax Credit, the Interactive Digital Media Tax Credit and the Film and Television Tax Credits. It is proposing to eliminate the Sound Recording Tax Credit.

Measures Affecting Individuals

Personal Income Tax Rates

The Budget does not propose any changes to personal income tax rates.

As announced in 2015 federal Budget, the gross-up factor and federal dividend tax credit rate that applies to non-eligible dividends will change. As a result, the combined Ontario and federal tax rates for non-eligible dividends will increase starting in 2016 as a result of the 2015 federal Budget.

The combined federal and Ontario top marginal rates for 2015 are unchanged, and set out in the following table:

Measures Affecting Businesses

The Budget proposes no changes to corporate income tax rates which remain as follows for 2015:

As a result of the 2015 federal Budget, the proposed increase in the small business deduction will lower the income tax rate for small business by 0.5% per year. The income tax rate on the first $500,000 of active business income will decrease from 15.5% to 13.5% over the period from 2016 to 2019.

Apprenticeship Training Tax Credit

For eligible expenditures related to apprentices who commenced an apprenticeship program after April 23, 2015 the government proposes to decrease the general tax credit rate from 35% to 25% and the rate for small business with salaries or wages under $400,000 per year from 45% to 30%.

Ontario Interactive Digital Media Tax Credit (OIDMTC)

The government proposes to amend the OIDMTC to focus the credit on entertainment products and on educational products for children under the age of 12.

Ontario Production Services Tax Credit (OPSTC) and Ontario Computer Animation and Special Effects Tax Credit (OCASE)

Both the OPSTC and OCASE will reduced as announced in the 2015 Budget. With respect to the OPSTC, this credit will decrease from 25% to 21.5% for qualifying production expenditures incurred after April 23, 2015. In order to ensure the credit fosters employment in Ontario, a qualifying corporation's Ontario labour expenditures would have to amount to at least 25% of total expenditures.

The OCASE is proposed to be reduced from 20% to 18% for expenditures after April 23, 2015.

Ontario Resource Tax Credit and Additional Tax on Crown Royalties

Ontario will eliminate the Ontario Resource Tax Credit and the Additional Tax on Crown Royalties that are provided in lieu of a deduction for royalties and mining taxes. It will provide a deduction for royalties and mining taxes paid, effective April 23, 2015.

Paralleling Federal Changes

After having studied the taxation of trusts and estates, Ontario proposes to change the way it taxes testamentary trusts and estates, by paralleling the federal approach of applying the highest personal income tax rate to all trusts, with some exceptions, beginning for taxation years ending after December 31, 2015, pending introduction of legislative amendments.

Graduated Rate Estates will be eligible for the graduated federal rates for the first 36-months, as will trusts created as a consequence of the death of an individual who has beneficiaries eligible for the federal Disability Tax Credit.

The Ontario tax credit for charitable donations over $200 would be raised to 17.41% for trusts that pay the top marginal personal tax rate.

Other Measures

Tackling Climate Change

Ontario intends to join Quebec and California in moving forward with a cap-and-trade system as its carbon pricing mechanism. Ontario will consult throughout the summer, listening to experts, industry and environmental groups, as it develops the design of a cap-and-trade program.

Registration of Road Building Machines

The government is currently reviewing potential registration and licensing requirements to be imposed on some of these vehicles, developing a registration process and meeting with various stakeholders to receive input on this measure.

Transfer tax for electricity assets

Municipal electricity utilities (MEUs) are subject to a transfer tax of 33% on the fair market value of electricity assets sold to the private sector, less any payments in lieu or Ontario corporate income tax paid up to the time of the transfer. The budget will reduce the transfer tax from 33% to 22%, exempt MEUs with fewer than 30,000 customers from the transfer tax, and exempt gains arising under the payment in lieu of tax deemed disposition rules, for the period beginning January 1, 2016 and ending December 31, 2018.

Property Tax Measures

Ontario announced that it is working to improve the property tax assessment system before the next province-wide reassessment in 2016. Further to what was announced in the 2013 Economic Outlook, Ontario continues consultations on the Provincial Land Tax, which applies to land outside municipal areas in Northern Ontario. Currently this tax is significantly lower than the property tax levied by adjacent municipalities.

Pension Programs

The Budget includes several programs to take effect over a period of several years.

Ontario Retirement Pension Plan (ORPP)

As first announced in the 2014 Budget, and introduced in Bill 56, the government is moving forward with a new mandatory provincial pension plan, the ORPP to take effect by January 1, 2017. Required contributions are not to exceed 3.8% of earnings (up to a maximum annual earnings threshold of $90,000, in 2014 dollars), with half to be funded by each of the employer and the employee. The Ontario Retirement Pension Plan Administration Corporation will be established for administering the ORPP.

Pooled Registered Pension Plans (PRPP)

On December 8, 2014, Ontario introduced the Pooled Registered Pension Plan Act, 2014. The proposed Act provides a legal framework for the establishment and administration of PRPP. PRPPs would give both employees and self-employed individuals a new voluntary, low-cost, tax assisted option to help increase retirement savings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Crowe MacKay LLP
Collins Barrow National Incorporated
Crowe MacKay LLP
Minden Gross LLP
Collins Barrow National Incorporated
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Crowe MacKay LLP
Collins Barrow National Incorporated
Crowe MacKay LLP
Minden Gross LLP
Collins Barrow National Incorporated
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions