2020 Ontario Budget

The 2020 Ontario Budget was released on November 5, 2020. The following are a few of the tax highlights that could be relevant to you:

Employer Health Tax

The EHT exemption (the payroll threshold above which employers are subject to EHT, on an associated basis) had been temporarily increased to $1 million (from $490,000) for 2020. The budget proposes to:

  • make the $1 million EHT exemption permanent
  • move the next scheduled inflationary adjustment of the EHT exemption to January 1, 2029 (from 2024)
  • increase the payroll threshold for payment of monthly EHT instalments to $1,200,000 (from $600,000), starting 2021

Ontario Research and Development Tax Credit (ORDTC)

Corporations generally have 18 months after their taxation year end to file an ORDTC claim. The budget extends ORDTC claim filing deadlines that would ordinarily fall in the period from March 13, 2020 to December 30, 2020, to the earlier of:

  • six months after the standard deadline, and
  • December 31, 2020

This parallels the federal scientific research and experimental development claim filing deadline extensions.

Seniors’ Home Safety Tax Credit (SHSTC)

The budget introduces a temporary refundable personal tax credit for improvements made to a senior’s principal residence in Ontario to facilitate safety and accessibility. The SHSTC will provide a tax credit of 25% on up to $10,000 of eligible expenses (maximum credit of $2,500) that are paid or become payable in 2021. The $10,000 maximum can be shared by individuals who share a home, including spouses and common-law partners. Eligible claimants must retain receipts and claim the SHSTC in their 2021 personal tax returns.

Ontario staycation

To support Ontario’s tourism sector, the government is exploring ways to provide Ontario residents with support of up to 20% for eligible Ontario tourism expenses, to encourage them to discover Ontario in 2021 when public health experts advise that it is safe to do so. The government will consult with stakeholders; details will be announced later.

Property tax

The budget proposes to:

  • reduce the highest Business Education Tax rates for employers across Ontario to 0.88% for commercial and industrial properties, beginning in 2021
  • permit municipalities to:
    • adopt a new optional property subclass for small business properties
    • reduce property taxes to eligible small business properties

In addition, as a result of the province’s property assessment and taxation system review, Ontario will:

  • support creating optional new assessment tools that can be used for redevelopment areas; this is to address concerns for small businesses in redevelopment areas where there is a potential for speculative sales to impact property assessments, which can, in turn, increase a business’ property tax burden
  • work with stakeholders to identify options to enhance the accuracy and transparency of the complex assessment methodologies used by Municipal Property Assessment Corporation (MPAC) to assess certain types of properties, specifically large industrial facilities