The following points highlight several of the various tax-related measures included in Greg Sorbara’s last budget, presented prior to Ontario’s upcoming October election.
Personal Tax Measures
- Ontario will follow the federal initiative to allow couples to split “qualifying” pension income, commencing in 2007. This proposal will provide tax savings for many senior couples.
- Increased threshold at which the Ontario Property and Sales Tax Credits for senior couples will be reduced. Details are to be announced when the federal government finalizes the Old Age Security and Guaranteed Income Supplement amounts for 2007.
- Introduction of the Ontario Child Benefit (OCB) to assist low-income families with children under age 18. Once fully implemented in 2011, the OCB will provide a maximum annual benefit per child of $1,100.
Business Tax Measures
- As proposed in the 2006 budget, the capital tax will be eliminated effective July 1, 2010. Currently, the exemption limit is $12.5M.
- The budget included a reminder that beginning with taxation years ending in 2009, Canada Revenue Agency will administer Ontario’s corporate income tax system, resulting in reduced compliance costs for Ontario corporations.
- A new 4.5% non-refundable scientific research and experimental development (SR & ED) tax credit will apply for taxation years ending after 2008. This credit replaces the Ontario deduction for the portion of the federal Investment Tax Credit resulting from eligible Ontario SR & ED expenditures.
- Since 2004, the Apprenticeship Training Tax Credit (ATTC) has provided a 25-30% refundable tax credit on salaries and wages paid to eligible apprentices. Eligibility for the credit of up to $5,000 per apprentice will be extended to apply to eligible employment commencing before January 1, 2012. Also, six additional trades will be added to the lengthy list of skilled trades that are eligible for the credit.
- Ontario’s minimum wage, currently set at $8.00, will increase to $10.25 by 2010 through annual 75 cent increases commencing March 31, 2008.
Your local DJB professionals are available at your convenience to review the impact of these provisions on your personal or business affairs. Please call with any questions or if you require any further information on these or any other matters.