Tax Insights: 2021 Ontario Economic Outlook and Fiscal Review ─ Tax highlights

Issue 2021-28

In brief

On November 4, 2021, Ontario’s Minister of Finance, Peter Bethlenfalvy, presented the province’s Economic Outlook and Fiscal Review (economic statement). The economic statement does not change corporate or personal income tax rates, but does:

• introduce beneficial ownership information requirements for certain privately-held corporations, effective January 1, 2023 

• provide a 2022 refundable “staycation” tax credit for Ontario residents vacationing in the province

• extend the Ontario Jobs Training Tax Credit and Seniors’ Home Safety Tax Credit to 2022

This Tax Insights discusses these and other tax initiatives outlined in the economic statement.

In detail

Business tax measures

Beneficial ownership registry

Ontario is proposing legislative amendments to the Business Corporations Act (Ontario) to introduce beneficial ownership information requirements for certain privately-held corporations, effective January 1, 2023. These amendments would require privately-held corporations to collect and maintain certain types of information regarding an “individual with significant control” over the corporation (i.e. a “transparency register”), and make it available upon request to law enforcement, tax authorities and certain regulatory authorities (e.g. Ontario Securities Commission). The Ontario government intends to engage with stakeholders on the implementation of these measures to ensure they do not impose undue burden on business owners.

Individual with significant control

An “individual with significant control” is generally an individual holding, directly or indirectly, shares representing 25% or more of the votes or value of the company, or having direct or indirect influence over the corporation without owning at least 25% of the shares. It would also include a person that owns or controls a significant number of shares jointly with other people and, if a group of related persons collectively controls at least 25% of the shares of a corporation, then each member of the related group would also be an individual with significant control.

The following information would need to be maintained for each individual with significant control:

• name, date of birth and address

• jurisdiction of residence for tax purposes

• the date on which the individual became or ceased to be an individual with significant control

• a description of how the individual has significant control over the corporation, including any interests and rights in shares of the corporation

• a description of the steps taken to keep this information current each year

Updates would need to be made at least once annually and within 15 days of the corporation becoming aware of a change to any relevant information. 

Corporate income tax rates

Ontario’s corporate income tax rates will remain as shown in the table below. The table also shows combined federal/Ontario corporate tax rates.

Personal tax measures

Personal income tax rates

The economic statement does not change Ontario personal income tax rates. The top two combined federal/Ontario personal income tax rates are shown below.

Ontario Staycation Tax Credit

The Ontario government is proposing a new, temporary Ontario Staycation Tax Credit for the 2022 taxation year. Ontario residents can claim this 20% refundable tax credit on eligible accommodation expenses incurred for a leisure stay of less than one month at an eligible accommodation (e.g. hotel, resort, cottage, campground, bed-and-breakfast establishment) in Ontario between January 1 and December 31, 2022. The maximum credit will be $200 for an individual and $400 for a family.

Other personal tax credits

The economic statement proposes to extend the following temporary refundable tax credits by one year to 2022, so that they will be available to eligible individuals to claim for the 2021 and/or 2022 taxation years:

• Ontario Jobs Training Tax Credit

• Seniors’ Home Safety Tax Credit

Other measures

Property tax

The Ontario government continues to consider input and submissions that it has received during its review of Ontario’s property assessment and taxation system. Proposed preliminary measures include:

• maintaining the same valuation date, for 2022 and 2023 property assessments, as was used for 2021

• streamlining the administrative process for the Brownfields Financial Tax Incentive Program (used to incent the redevelopment of unproductive contaminated lands by reducing municipal and education property taxes) and extending the period for matching provincial education tax assistance, from three to: 

  • six years, for business developments

  • ten years, for residential developments 

• increasing the assessment threshold to $100,000 (from $50,000) for the reduced tax rate for property used for eligible on-farm business activities, in addition to introducing further new farm-related measures

• simplifying the legislative requirements relating to the assessment of pipeline properties, including the designation of pipelines by owners

Technical amendments

Technical amendments that are proposed include amending:

• the Taxation Act, 2007, to clarify that the Ontario Tax Reduction and the Low-income Individuals and Families Tax Credit are available on the final tax return of a deceased person and ensure they are not available for a bankrupt individual

• the Employer Health Tax Act to update the instalment thresholds related to interest and penalties, from $600,000 to $1.2 million