Tax Highlights of the 2021 Ontario Economic Outlook and Fiscal Review

Ontario’s Minister of Finance, Peter Bethlenfalvy, presented the province’s Economic Outlook and Fiscal Review last November 4, 2021. It does not change corporate or personal income tax rates, but it highlights the following tax initiatives:

  • tax

    extend the Ontario Jobs Training Tax Credit and Seniors’ Home Safety Tax Credit to 2022

  • provide a 2022 refundable “staycation” tax credit for Ontario residents vacationing in the province
  • introduce beneficial ownership information requirements for certain privately-held corporations, effective January 1, 2023 

This article discusses these and other tax initiatives outlined in the economic statement.

Business Tax Measures

Effective January 1, 2023, Ontario is proposing legislative amendments to the Business Corporations Act (Ontario) to require beneficial ownership information for certain privately-held corporations. These amendments would require privately held corporations to collect and maintain certain types of information about “individuals with significant control” over the corporation itself (a “transparency register”), and to make it available to law enforcement, tax authorities, and certain regulatory authorities upon request (e.g. Ontario Securities Commission). The Ontario government plans to consult with stakeholders before implementing these measures to ensure that they do not place an undue burden on business owners.

Individuals with significant control

The proposed information requirements would apply to an individual, referred to as an “individual with significant control,” who:

  • Owns, controls, or directs 25 percent or more of the voting shares of the corporation or shares that are worth 25 percent or more of the fair market value of all outstanding shares of the corporation; or
  • Has direct or indirect influence over the corporation without owning at least 25 percent of the shares.

A person would also be an individual with significant control if they own or control a significant number of shares jointly with other people. In addition, if a group of related persons collectively controls at least 25 percent of the shares of a corporation, then each person would be an individual with significant control. A related person would include an individual and their spouse, son or daughter, or any other relative living in the same house.

Personal and Corporate Tax Measures

The economic statement does not change Ontario’s personal and corporate income tax rates.

Property Tax

The Ontario government continues to consider input and submissions that it has received during its review of Ontario’s property assessment and taxation system. Proposed preliminary measures include:

  • maintaining the same valuation date, for 2022 and 2023 property assessments, as was used for 2021
  • streamlining the administrative process for the Brownfields Financial Tax Incentive Program (used to incent the redevelopment of unproductive contaminated lands by reducing municipal and education property taxes) and extending the period for matching provincial education tax assistance, from three to: 
    • six years, for business developments
    • ten years, for residential developments 
  • increasing the assessment threshold to $100,000 (from $50,000) for the reduced tax rate for property used for eligible on-farm business activities, in addition to introducing further new farm-related measures
  • simplifying the legislative requirements relating to the assessment of pipeline properties, including the designation of pipelines by owners

Ontario Staycation Tax Credit

The Ontario government is proposing a new, temporary Ontario Staycation Tax Credit for the 2022 taxation year. Ontario residents can claim this 20% refundable tax credit on eligible accommodation expenses incurred for a leisure stay of less than one month at an eligible accommodation (e.g. hotel, resort, cottage, campground, bed-and-breakfast establishment) in Ontario between January 1 and December 31, 2022. The maximum credit will be $200 for an individual and $400 for a family.

Other personal tax credits

The economic statement proposes to extend the following temporary refundable tax credits by one year to 2022, so that they will be available to eligible individuals to claim for the 2021 and/or 2022 taxation years:

To keep yourself posted on similar updates, stay tuned with IDM Professional Corporation CPA.

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