Tax Plan for Jobs and Growth
Ontario's Tax Plan for Jobs and Growth has helped to make Ontario one of the most attractive places in the industrialized world to invest. Ontario follows only California and New York as the world's favourite destination for foreign direct investment in North America.
Benefits for all Ontarians
Ontario's personal income tax system is competitive and fair, raising revenue to fund priorities that matter to Ontario families, like health care and education.
- Nine out of 10 Ontario taxpayers received a permanent income tax cut from 6.05 per cent to 5.05 per cent on Jan. 1, 2010, including 90,000 people with low incomes who no longer pay Ontario personal income tax.
- This means Ontarians benefit from the lowest provincial tax rate in Canada on the first $39,020 of taxable income in 2012.
- For people earning up to $75,000 in 2012, Ontario has one of the lowest provincial income tax rates, and is generally in line with other provinces and neighbouring American states.
- The government also provided one-time assistance for single people (up to $300) and families (up to $1,000) to help with the transition to the Harmonized Sales Tax (HST).
- The government has created a new temporary Deficit-Fighting High-Income Tax Bracket for people earning more than $500,000 annually. All revenue will be used to reduce the deficit and accelerate Ontario's five-year plan to balance the budget by 2017-18.
- The proposed Healthy Homes Renovation Tax Credit is a permanent, refundable tax credit of up to $1,500 each year. It would help seniors with the cost of eligible home renovations that improve accessibility, which would in turn help them to stay in their homes longer. The credit could be claimed by senior homeowners and tenants, and people who share a home with a senior relative.
- The Ontario Trillium Benefit (OTB) will provide $2.4 billion in tax relief to 3.5 million Ontarians each year.
- The OTB will allow Ontarians to receive their tax credits monthly, helping them to better manage their regular expenses. The OTB includes payments of the Ontario Sales Tax Credit, Ontario Energy and Property Tax Credit and the Northern Ontario Energy Credit. Starting in July 2012, eligible Ontarians will receive their first OTB installment, instead of waiting until early 2013.
Tax Measures for Businesses
Tax reform is making Ontario's businesses more competitive, our economy stronger and is creating jobs for families.
- The Tax Plan for Jobs and Growth included:
- Moving to a Harmonized Sales Tax (HST).
- Reducing the statutory Corporate Income Tax rate for large and small businesses.
- Eliminating the small-business deduction surtax.
- The tax plan, along with the elimination of Capital Tax, provides business savings of over $8 billion per year.
- For large and small businesses alike, the HST means they do not pay sales tax on many of the purchases they make during commercial transactions.
- The HST will eventually result in the removal of about $4.6 billion a year in taxes paid by businesses.
- The government also provided one-time assistance for small businesses of up to $1,000 to help with the transition to the HST.
- These tax measures have also reduced compliance costs for business by reducing unnecessary duplication. In total, the move to a single HST administration and a single corporate tax administration provides compliance cost savings of over $635 million per year.
- Until the budget is balanced, the government is freezing the general Corporate Income Tax rate and Business Education Tax rate reductions.
- In 2011, more than 121,000 jobs were created in Ontario - with full-time employment increasing by 123,400.
- The unemployment rate declined to 7.8 per cent in May - compared to 9.4 per cent at the height of the global recession in June 2009.
- Ontario's economy is projected to grow at 1.7 per cent in 2012, 2.2 per cent in 2013 and 2.4 per cent in 2014.
- Ontario attracted 840 foreign direct investment projects between 2003-2011, accounting for about $50 billion and over 97,500 jobs, according to fDi Intelligence.