Resources

2021 Ontario Budget Highlights

On March 24, 2021, the Ontario Provincial Government released their 2021 Budget called Ontario’s Action Plan: Protecting People’s Health & Our Economy.

Showing a significant impact from the COVID-19 pandemic, Ontario’s real gross domestic product (GDP) is estimated to have declined by 5.7 per cent in 2020.

Ontario is projecting a $38.5 billion deficit in 2020–21. Over the medium term, the government projects steadily declining deficits of $33.1 billion in 2021–22, $27.7 billion in 2022–23 and $20.2 billion in 2023–24.

Here are the highlights of the 2021 Ontario Budget:

CORPORATE INCOME TAX

Here are the current corporate income tax rates:

Corporate Income Tax Rates
As of January 1, 2021

 Ontario  Combined
Federal and Ontario
 General 11.5% 26.5%
 M&P: Manufacturing or Processing 10% 25%
 Canadian-controlled Private Corporations1 3.2% 12.2%
 1On first $500,000 of active business income.


Ontario Small Business Support Grant

To help small businesses, Ontario is providing a second round of Ontario Small Business Support Grant payments of $10,000 to $20,000 to eligible recipients. Small businesses who are confirmed eligible recipients of the Ontario Small Business Support Grant will be automatically entitled to a second payment in an amount equal to the first payment they received. They will not need to apply again to receive this additional funding.

Haven’t applied yet? Time is running out. Submit your application by March 31, 2021 at 11:59 PM EST.

For more information and to apply, view this link: https://www.app.grants.gov.on.ca/msrf/#/

TAX MEASURES

Enhanced CARE Tax Credit

In 2019, the Ontario government introduced the Ontario Childcare Access and Relief from Expenses (CARE) refundable tax credit for families with income of less than $150,000.  The government is proposing a 20 per cent enhancement of the CARE tax credit for 2021. This would increase support from $1,250 to $1,500, on average in additional support for the childcare expenses.

Job Training Tax Credit

A new job training tax credit for 2021 provides up to $2,000 per person for 50 per cent of eligible expenses. Eligible individuals can claim the Ontario Jobs Training Tax Credit on their 2021 Personal Income Tax return if they meet the following conditions:

  • They are resident in Ontario on December 31, 2021; and
  • They have a Canada training credit limit for 2021 greater than zero.

Qualifying expenses include tuition and other fees paid to an eligible educational institution in Canada for courses taken in 2021; or fees paid in respect to an occupational, trade or professional examination taken in 2021.

Seniors’ Home Safety Tax Credit

The Seniors’ Home Safety Tax Credit is for seniors who are 65 years of age or older at the end of 2021 and/or people who live with seniors.  The credit is worth 25% of up to $10,000 in eligible expenses for a senior’s principal residence in Ontario. The maximum credit is $2,500. Eligible expenses include home renovations that improve safety and accessibility or help a senior be more functional or mobile at home, for example:

  • grab bars and related reinforcements around the toilet, bathtub and shower
  • wheelchair ramps
  • stair lifts
  • elevators
  • renovations to permit first floor occupancy or a secondary suite for a senior

You can claim the tax credit when you file your taxes for the 2021 taxation year.

PERSONAL INCOME TAX

Here are the personal income tax rates:

2021 Top Marginal Personal Income Tax Rates
Combined Federal / Provincial

 Interest and regular income 53.53%
 Capital gains 26.76%
 Eligible dividends 39.34%
 Non-eligible dividends 47.74%


Ontario COVID-19 Child Benefit

The government is providing a third round of payments to support parents through the Ontario COVID-19 Child Benefit. The payment will be doubled to $400 per child for this round and $500 for each child with special needs.

Full Budget Document

The entire budget is available on this link: https://budget.ontario.ca/2021/contents.html