Highlights of the Tax Measures in Ontario’s 2009 Budget

  • Sales Tax: Ontario will eliminate its provincial sales tax effective July 1, 2010; harmonize with the federal GST/HST effective that date.  
  • Corporate Income Tax: Ontario will reduce its corporate income tax rates as follows:
  • Corporate Minimum Tax:  
    • The Corporate Minimum Tax (CMT) rate will be reduced to 2.7% for taxation years ending after June 30, 2010.  
    • The CMT threshold will be increased from $5 million in assets to $50 million in assets and $10 million in revenues to $100 million in revenues; corporations below these thresholds do not pay CMT.
  • Corporate Capital Tax: The Ontario budget confirmed the intention to (a) cut all remaining capital tax rates by 1/3rd effective January 1, 2010 and (b) to eliminate capital tax completely on July 1, 2010.
  • Accelerated Capital Cost Allowance (CCA): Ontario will match the measures announced in the federal government to increase capital cost allowance for the following:
    • Computers & software purchased after January 27, 2009 will be entitled to 100% CCA in the first year (i.e. the half-year rule will not apply).
    • Manufacturing & processing machinery & equipment was entitled in 2010 and 2011 to 50% CCA on a decliningbalance basis. Ontario will match the federal government’s intention to allow 50% on a straight-line basis for these years.
  • Ontario’s Refundable Tax Credit Programs: The Ontario budget also proposes a number of enhancements to Ontario’s refundable tax credit programs, including:
    • Ontario Film & Television Tax Credit
    • Ontario Production Services Tax Credit
    • Ontario Interactive Digital Media Tax Credit
    • Ontario Computer Animation & Special Effects Tax Credit
    • Ontario Book Publishing Tax Credit
    • Co-operative Education Tax Credit
    • Apprenticeship Training Tax Credit