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Ontario's Tax Plan Creates Jobs and Strengthens Economy

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Ontario's Tax Plan Creates Jobs and Strengthens Economy

McGuinty Government Helps Families and Individuals Transition to New System

Ministry of Finance

Ontario families will not see a change in tax on 83 per cent of purchases when the Harmonized Sales Tax (HST) comes into effect July 1.

For example basic groceries, municipal transit and prescription drugs will continue to be exempt from sales tax. Other products will be eligible for point-of-sale rebates for the eight per cent provincial portion of the HST. These include newspapers, books (including audio books), diapers, children's clothing and footwear, children's car seats and booster seats, feminine hygiene products, and prepared food and beverages sold for $4 or less.

This is part of Ontario's modernization of an out-dated, 50-year-old, tax system. The plan also includes permanent income tax cuts for families and businesses, and permanent sales tax credits. In addition to these changes, families will begin receiving Ontario Sales Tax Transition Benefit (OSTTB) payments today as part of Ontario's tax plan. These tax free transition payments are the first of up to three payments that will provide eligible families with up to $1,000, and individuals with up to $300.

This Tax Plan for Jobs and Growth  is a key component of the five-year Open Ontario Plan, which supports job creation and enhances the programs and services, including education, health care and skills training, that Ontarians value.

Quick Facts

  • Buyers of new homes will receive a rebate of up to $24,000 regardless of the price of the new home. The HST will not apply to purchases of resale homes.
  • On January 1, 2010, all Ontario taxpayers got a 16.5 per cent cut in the tax rate on their first $37,106 of taxable income - that's the lowest rate of any province in Canada.
  • On average, Ontario families and individuals with up to $80,000 of taxable income are getting a personal income tax cut of 10 per cent.
  • The new permanent Ontario Sales Tax Credit will provide low- to middle-income people up to $260 per person a year.

Additional Resources


“Some people have said the HST will drive up the cost of everything. That's not true. The HST only affects 17 per cent of consumer purchases. So, 83 per cent of what we buy will be unaffected. Our plan is the right plan to help Ontario's economy become more competitive.”

Dwight Duncan

minister of Finance

“Our tax cuts, tax credits, and other reforms will help families and low income earners. And the HST eliminates layers of hidden tax to make business more efficient, which means more jobs”

Sophia Aggelonitis

Minister of Consumer Services, MPP Hamilton Mountain

“Our government's tax plan is good for the Hamilton area. It helps protect hardworking Ontario families and gives our local business greater opportunities for growth and long-term success.”

Ted McMeekin

MPP Ancaster-Dundas-Flamborough-Westdale

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