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On November 6, 2025, the Ontario Finance Minister released the 2025 Ontario Economic Outlook and Fiscal Review: A Plan to Protect Ontario (2025 Economic Outlook), which included various new tax measures. A brief summary of notable new tax measures of interest to Canadian businesses is set out below.
Key Tax Measures
Ontario's Tax Action Plan
The Ontario Government (the Government) announced that it is developing a multi-year Tax Action Plan aimed at positioning Ontario as Canada's most competitive jurisdiction. The Tax Action Plan follows a comprehensive two-year review of Ontario's tax system, and will seek to modernize both personal and corporate income taxes to attract more investment, increase Ontario's competitiveness globally, and reduce costs for individuals.
The Government will deliver an update on the Tax Action Plan in the 2026 Ontario Budget.
Enhancing the Ontario Made Manufacturing Investment Tax Credit
The Ontario Made Manufacturing Investment Tax Credit (OMMITC) is a refundable tax credit available to qualifying Canadian-controlled private corporations (CCPCs) for eligible investments in buildings, machinery, and equipment used in the manufacturing or processing of goods in Ontario.
The OMMITC was first introduced in the 2023 Ontario Budget. In the 2025 Ontario Budget, the Government proposed temporarily boosting the OMMITC rate from 10 to 15 per cent for CCPCs. The 2025 Ontario Budget also proposed expanding the OMMITC by providing a 15 per cent non-refundable version of the credit to corporations that are not CCPCs, but which carry on business in Ontario through a permanent establishment. The Government is now introducing amendments to the Taxation Act, 2007 (Ontario) to implement these enhancements. In each case, qualifying expenditures would need to be made on or after May 15, 2025, and before 2030. Although the refundable OMMITC is proposed to be repealed effective January 1, 2030, there is also a statement that, prior to its expiration, the Government will review the credit to assess its effectiveness, compliance burden and administrative costs.
In addition, the Government is proposing further expansions of the OMMITC as described below.
Under the current rules as they relate to machinery and equipment, the eligible expenditures must occur in the same year that the related machinery and equipment becomes "available for use" for capital cost allowance purposes, as set out in the Income Tax Act (Canada). The Government is proposing to amend the OMMITC eligibility criteria so that qualifying corporations can receive tax credits (up to $3 million per year) for investments in machinery and equipment in circumstances where the expenditures are incurred in the taxation year immediately prior to the taxation year in which the related machinery and equipment becomes available for use. This proposed amendment would apply to expenses incurred on or after March 23, 2023 and would apply to both the refundable and non-refundable credits for all qualifying corporations.
Limited Non-Resident Speculation Tax Relief
The Government plans to revise a regulation under the Land Transfer Tax Act regarding the Non-Resident Speculation Tax (NRST) to promote economic investment in Ontario.
A new NRST rebate will give buyers relief in cases where certain residential properties have been repurposed for industrial use. To be eligible, the property must be re-designated as part of the Industrial Property Class, Large Industrial Property Class, or Aggregate Extraction Property Class, as defined in the Assessment Act, no later than four years after the purchase.
This rebate would apply to property conveyances taking place on or after November 6, 2025.
Providing Harmonized Sales Tax Relief for First-Time Home Buyers on New Homes
The Government proposes a temporary removal of the full 8 per cent provincial portion of harmonized sales tax (HST) for first-time home buyers on eligible new homes valued up to $1 million. New homes valued between $1 million and $1.5 million would be eligible for reduced relief, and no relief would be available for homes valued at $1.5 million or above. This new rebate is intended to mirror the proposed federal Goods and Services Tax/Harmonized Sales Tax (GST/HST) First-Time Home Buyers Rebate. The Government says it will coordinate with the federal government to introduce this provincial rebate, pending approval of the federal one.
The Government intends to have the rebate apply to agreements of purchase and sale entered into on or after May 27, 2025, and before 2031. Notably, construction of the home must begin before 2031 and substantial completion of the home must be achieved before 2036.
Establishing a Beneficial Ownership Registry
The Government proposes to amend the Corporations Information Act to create a Beneficial Ownership Registry for private business corporations by 2027. This registry is primarily intended to combat money laundering.
Currently, corporations must track details about individuals with significant control over the company, including: name, birth date, last address, tax residence, control details, and other prescribed information. However, law enforcement and regulators can only access this data by requesting it from the company.
With the proposed changes, corporations would submit beneficial ownership information online, making it easier for authorized agencies to access.
Other New Tax Measures and Statements
- Strengthening Ontario's Nuclear Future — Ontario Calls for Federal Action:The 2025 Economic Outlook includes a statement that Ontario has called on the federal government to "enact and enhance" all outstanding clean economy investment tax credits, with a view to providing an opportunity for Ontario to develop its electricity and electrification infrastructure.
- Supporting Ontario's Shortline Railways: The 2025 Economic Outlook introduces legislation to implement the Ontario Shortline Railway Investment Tax Credit (OSRITC), which would offer a 50 per cent refundable corporate income tax credit for eligible track maintenance and rehabilitation expenditures (e.g., investments in labour and capital assets related to railway maintenance, repairs and improvements) made on or after May 15, 2025, and before 2030. Qualifying railways could receive up to $8,500 per track mile per year.
- Positioning Ontario's Defence Industry for Growth: Ontario is considering tax incentives to boost industry investment in key defence and resilience technologies, such as artificial intelligence, cybersecurity, autonomous systems, and advanced sensing.
- Creating More Pension Options for Workers: Based on pension sector consultations, the Government intends to expand retirement savings options by developing a framework for Variable Life Benefits (VLB). Retirees selecting a VLB would receive monthly lifetime payments that vary based on fund performance and member mortality. This new framework would allow VLBs to be offered from pooled registered pension plans, defined contribution pension plans and pension plans that provide for additional voluntary contributions.
- Modernizing Ontario's Alcohol Market:The 2025 Economic Outlook states that Ontario is continuing to explore a progressive alcohol tax and mark-up system, and is committed to promoting and prioritizing small producers, including Ontario-made products.
- Technical Amendments: The Government is also proposing various technical tax amendments.
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