On March 28, our Provincial Government presented its 2018 Budget “A Plan for Care and Opportunity.”
While the budget announces a surplus of $0.6 billion for 2017-18, significant spending increases will put the province in deficits of $6.7 billion for 2018-19 and $6.6 billion for 2019-20.
This article outlines various highlights of the 2018 Ontario Budget.
Corporate Income Tax:
Corporate Income Tax Rates – As of January 1, 2018
|Ontario||Combined Federal and Ontario|
|M&P: Manufacturing or Processing||10||25.00%|
1 On first $500,000 of active business income.
2 This rate reflects the Federal government’s proposal to reduce the federal small business tax rate to 10% (from 10.5%) as of January 1, 2018.
Employer Health Tax:
The provincial government is proposing changes to the Employer Health Tax (EHT) exemption to limit the availability of the exemption. The proposed change would result in only Canadian controlled private corporations (CCPC), partnerships, charities, not-for-profit organizations, private trusts, and individuals being eligible for the exemption starting January 1, 2019.
Personal Income Tax:
The government is proposing to increase the top rate of the non-refundable Ontario Charitable Donations Tax Credit (OCDTC). The OCDTC rate for donations made in excess of the first $200 per year will increase to 17.5% for all taxpayers. This measure is meant to give more tax relief to lower income donors. Some higher income earners will realize a very small (less than 1%) decrease in the OCDTC rate due to the elimination of the surtax.
Beginning in September 2020, Ontario will fully fund licensed child care for preschool-aged children from the age of two-and-a-half until kindergarten.