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Tax Plan Helps Farmers Grow The Economy

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Tax Plan Helps Farmers Grow The Economy

McGuinty Government To Provide Tax Relief To Agricultural Sector

Ontario's tax plan will help farmers, rural communities and agri-businesses save money, become more competitive in markets around the world and create jobs.

By modernizing an outdated, 50-year-old tax system, the province is cutting taxes for families and businesses and combining two existing sales taxes into one - the Harmonized Sales Tax (HST). It puts Ontario farmers on a level playing field with four other provinces.

Starting July 1, farmers and many agri-businesses can expect to save $15 million annually from reductions in Corporate Income Tax (CIT). Their tax rate will drop from 12 to 10 per cent on farming income.

Farmers will also now be exempt from the Retail Sales Tax (RST) on business purchases such as trucks, industrial freezers and computers. Previously, they were only exempt from the federal government sales tax. This means farmers will be able to claim a 13 per cent rebate under the HST. This translates into an estimated savings of $30 million each year for farmers, rural communities and agri-businesses, or an average of $600 per farm.

These savings will allow farmers to sell more products, focus on new farming innovations, and buy new equipment and create new jobs.

Ontario's tax changes are part of the five-year Open Ontario plan to create jobs, grow the economy and build a stronger Ontario. It is estimated that these changes will help create almost 600,000 new, good jobs within the next 10 years.

Quick Facts

  • Cash receipts from farming operations in Ontario were valued at $10.2 billion in 2008.
  • In terms of farm cash receipts, Ontario's agriculture industry ranks first among all provinces.
  • Investment in farming equipment and machinery in Atlantic Canada jumped 12 per cent following the implementation of the HST.
  • The small business CIT rate will fall to 4.5 per cent, from 5.5 per cent.
  • Capital Tax was eliminated for farmers on January 1, 2007.

Additional Resources


“Ontario's farmers are the backbone of our province. This new tax plan will make sure farms can compete in the global marketplace by removing hidden taxes and reducing the cost of doing business.”

Carol Mitchell

Minister of Agriculture, Food and Rural Affairs

“The Harmonized Sales Tax makes good economic sense: governments and independent experts across the country agree on this. And we think that the agricultural sector, in the heartland of Ontario, will reap the benefits of this policy through tax breaks on their corporate income and inputs. This is good for Ontario's farming community.”

John Wilkinson

Minister of Revenue

“The HST will support the bottom line of Ontario farmers. Altogether we estimate they will save millions of dollars on farm inputs, like computer equipment and water purification systems, that were previously not exempt from the provincial sales tax. In total, Ontario's farmers stand to save up to $30 million a year.”

Bette Jean Crews

President, Ontario Federation of Agriculture

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